Daily International Grain Market View

A broad selloff to start of this week affected everything from stock markets to energy prices.?

Grain markets were also pushed lower.?

Corn prices fell around 0.75%.

Soybeans were down more than 1.5%.

Some wheat contracts dropped as much as 1.75%.

On macro markets, oil prices rose on this morning as analysts pointed to signs of U.S. supply tightness.

Yesterday there were important losses as global markets were haunted by the potential impact on China's economy of a crisis at heavily indebted property group China Evergrande.

Thus, Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday.?

The contract for West Texas Intermediate (WTI), which expires later on Tuesday, was up 6991 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.

On the financial side, shares in Evergrande, which has been scrambling to raise funds to pay its many lenders, suppliers and investors, sank 10.2%.

Investors fear troubles at China's property sector, one of the key engines of the country's stellar economic growth over decades, could have ripple effects across the global economy.

Thus on Wall Street, S&P500 shed 1.70%, the biggest drop in four months.?

Nasdaq Golden Dragon China index of U.S.-listed Chinese shares tumbled 5.4% to edge near 15-month lows hit last month.

Consequentially, global stock markets on this morning were caught in the grip of contagion fears.

Selling pressure persisted in early trade in Asia.

Japan's Nikkei fell 2.0%, resuming trade after a market holiday on Monday while MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.2%.

MSCI's ACWI shed 0.13%, a day after the gauge of the world's 50 stock markets lost 1.63%, its biggest decline in two months, and leaving it teetering at its lowest level in two months.

Markets in mainland China and Taiwan are still closed for a public holiday on Tuesday for mid-Autumn festival while Korean markets remain shut through Wednesday.

On the other hand, investors are looking for the Federal Reserve tapering timeline on its bond purchases as well as its board members' long-term rates and economic projections.?

This week we also will see policy decisions from many other central banks spanning Brazil, Britain, Hungary, Indonesia, Japan, Norway, the Philippines, South Africa, Sweden, Switzerland, Taiwan and Turkey.

Coming back on grains market, most areas east of the Mississippi River will see at least some measurable moisture between today and Friday, while areas farther west will stay dry during this time, per the latest 72-hour cumulative precipitation map from NOAA.?

The agency’s 8-to-14-day outlook calls for seasonally warm weather for most of the country between September 27 and October 3, with drier-than-normal conditions likely for the eastern two-thirds of the U.S. next week.

Meantime, the crop rating is up this week at 59% in corn as good to excellent, against 58% last week.?

Ditto in soybeans with an increase of one point to 58% as good to excellent against 57% last week.

Row crop harvest continues to pick up pace; corn harvest is at 10 per cent (pc) complete, soybeans 6pc and sorghum/milo 25pc.

Yield reports from harvested fields remain variable, with talk ranging from “pleasantly surprising” to “horrendous”.??

On the other hand, 21% of winter wheats are estimated to be sown against 12% last week and to be compared to 18% to date on the 5-year average.

Meantime, regular US weekly export inspections figures had corn at 403,000t, wheat 563,000t and beans at 274,000t.??

Thus corn export inspections jumped 153% higher from a week ago; soybean export inspections improved 42% from a week ago; wheat export inspections moved fractionally lower, week-over-week.

These numbers were roughly in line with traders' expectations.

Damage caused by Hurricane Ida has reduced recent loadings, but figures should increase in coming weeks.

In this context, corn basis bids were steady to weak, falling 5 to 30 cents lower at two Midwestern ethanol plants and tumbling 37 cents at an Ohio elevator.

Soybean basis bids dipped a penny lower at two interior river terminals while trending 5 cents higher at an Ohio facility.

Bids held steady elsewhere across the central U.S..

On European market, according to the European organization MARS, the average corn yields in Europe stand at 7.78 t / ha against 7.90 t estimated in August.?

However, this remains 0.3% above the 5-year average.?

In spring barley, the European yield is estimated at 4.23 t / ha against 4.30 t estimated last month but 2.9% above the 5-year average.?

Quality premiums for wheat remain high, like the bases in Sweden, which appear on the physical market at over € 12 / t compared to the December Euronext deadline.

Rapeseed prices gave ground yesterday after the € 600 / t test on Friday and in the wake of the decline in canola and soybean oil.?

From the Black Sea basin, as of tomorrow, export taxes for wheat in Russia are expected to drop to 50.90 usd / ton from 52.50 usd previously.?

Prices are showing a slight decline at the start of the week.?

They remain nevertheless posted around 305 usd / t in fob Russia.

Russian wheat exports remain high, posted at 1.2 million tonnes last week against 1.0 million tonnes the previous week.

Autumn plantings in Russia are progressing clearly thanks to a favorable climate, especially in the south of the country.??

Ukraine’s grain stocks are at 24.2 million metric tons through Sept. 1, per the country’s State Statistics Service.?

That’s a year-over-year increase of nearly 41% as the country prepares for the likelihood of a record-breaking grain harvest this year. Ukraine is a significant exporter of both corn and wheat.

Ukrainian corn harvest is underway, though slow field work is being reported with some wet fields and limited activity to date.

From South East Asia, Saudi Arabia’s SAGO announced completion of new storage at the Red Sea port of Yanbu which will increasing wheat storage capacity.

Now Saudi’s grains storage capacity increased by 37% with 2 new silos.

Indeed, Saudi strategic storage capacity of grains increased by 900,000 tons to 3.4mls between 2015 and 2021

From the Middle Kingdom, Chinese soybean purchases from Brazil in August rose nearly 11% year-over-year, reaching 332.2 million bushels.?

Indeed, China brought in 9.04 million tonnes of the oilseed from Brazil in August, up from 8.15 million tonnes a year earlier.

In contrast, Chinese imports of U.S. soybeans fell sharply last month, dropping nearly 90% year-over-year to less than 650,000 bushels amid shipping delays caused by Hurricane Ida.

China’s August corn imports rise 221%.

From Australia, local markets continued to follow the global board up and many are watching the weather maps for the next rain event with some of the crops in SA/Vic starting to show more stress.

On the international scene, to note a call for tenders from Algeria for durum wheat, a product whose world balance sheets are most strained, in particular following the drought in Canada and in the north of the USA.?

Jordan, for its part, is purchasing 120,000 t of feed barley.

Pakistan got different offers for wheat tender.

Price ranged from $383.50/mt CFR Karachi (Cargill, 120kmt from Black Sea/Baltic/ Argentina) to $393.30/mt CFR (Solaris for 110kmt for Black Sea/EU/Australia), vs 369.5 usd/mt Karachi 2 weeks ago.

We wish you a good day.