Daily International Grain Market View

US farm markets were mixed but mostly higher yesterday.?

Corn prices spilled slightly into the red by the close around 0,46% down.

Soybeans moved around 0.53% higher.

Spring wheat led the charge of wheat complex, moving 0.67% higher.?

Winter wheat contracts also made small inroads as the spillover strength from outside markets lent some support to the wheat, as did a weaker U.S. Dollar.?

However, only December Kansas City HRW futures picked up 0.1%, while December Chicago SRW futures shedded 0.03%.

On macro markets, oil prices rose on Tuesday and were near multi-year highs as an energy supply crunch continued across the globe, and falling temperatures in China revived concerns over whether the world's biggest energy consumer can meet domestic heating needs.

Thus Brent crude benchmark rose 75 cents to settle at $85.08 a barrel.?

U.S. West Texas Intermediate (WTI) futures also rose 75 cents to settle at $82.44 a barrel.

Since the start of September, Brent has risen by about 19%, while WTI has gained around 21%.

On this morning, however, oil prices fell after the Chinese government stepped up efforts to tame record high coal prices and ensure coal mines operate at full capacity as Beijing moved to ease a power shortage.

Thus Brent crude futures dropped 64 cents, or 0.8%, to $84.44 a barrel at 06:45 GMT,?

U.S. West Texas Intermediate (WTI) crude futures for November, which expires on Wednesday, was down 59 cents, or 0.7%, to $81.85 a barrel.

Data from the U.S. Energy Information Administration is due later during the afternoon.

On the financial side, in New York, the benchmark S&P 500 index gained 0.74% to finish just 0.4% below its early September record close while the CBOE market volatility index fell 0.6 point after earlier hitting 15.57, its lowest level since mid-August.

The Dow tilted 198,7 points higher in afternoon trading to 35,457,31 anchored by strong performances from key retailers like Walmart and others.

Meantime, Asian shares advanced and U.S. long-dated bond yields edged up to a five-month high on Wednesday on rising optimism about the global economy and corporate earnings while the yen slipped to a four-year low on the dollar.

Thus, Japan's Nikkei rose 0.8% while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%, led by 1.1% gains in Hong Kong and by 0.9% gains in Australia.

To note that Bitcoin stood at $63,937, near its all-time peak of $64,895 as the first U.S. bitcoin futures-based exchange-traded fund began trading on Tuesday.

Coming back on grains market, extended run weather maps have turned wetter again for early November for the US Corn Belt, adding chances of an inch or so of rain.

The agency’s 8-to-14-day outlook, indeed, predicts more seasonally warm weather for the central U.S. between October 26 and November 1, but a return to seasonally wet weather for the Midwest and Plains during this time.

Meantime, apart from South Dakota, southern Minnesota and central Wisconsin, the central U.S. will see very little or no additional rainfall between today and Saturday, per the latest 72-hour cumulative precipitation map from NOAA.?

In this context, harvests are progressing rapidly in the USA, reaching 60% soybeans and 52% corn last Sunday, above the five-year average.

However, final levels of row crop yields are still being determined along with growing confidence in USDA numbers.?

Corn quality ratings held steady, as analysts predicted, with 60% of the crop in good-to-excellent condition.?

Another 26% is rated fair (up a point from last week), with the remaining 14% rated poor or very poor (down a point from last week).

Nearly all (95%) of the soybeans crop is now dropping leaves, which mirrors the prior five-year average.?

With more than half the crop now harvested, USDA is no longer tracking quality ratings.?

A week ago, the agency marked 59% of the crop in good-to-excellent condition.

Current crop yield forecasts are trending higher, witness to good harvest results continuing.?

Thus plenty of bears starting to emerge from the woodwork.

Meantime, faced with the rise in fertilizer costs, many analysts are already anticipating a drop in corn areas for spring sowing in the USA in favor of soybeans.

Indeed, a US private forecaster pegged new crop corn planted area down 1 million acres from previous year and soybean area up 4.1 million acres implying increased double cropping.

As for wheat, winter wheat planting is pushing along without major hiccoughs.

US plantings were 70% complete as of October 17 according to the USDA, a pace close to the five-year average.?

And 31% of the crop is emerged, versus 19% a week ago and the prior five-year average of 35%.

In this context, corn basis bids were steady to mixed on Tuesday, moving as much as 5 cents higher at an Iowa processor while falling as much as 5 cents lower at an Illinois river terminal.

Soybean basis bids were steady to mixed across the central U.S., especially at interior river terminals, which shifted 10 cents lower at one location while firming 6 cents higher at another.

From South America, political concerns in Brazil amid Senate talk of attempts to charge the President with various crimes, and of a potential coup.

Meantime, Brazil’s Anec expects to see soybean exports reach 124.8 million bushels this month, which is a 14% increase from its prior projection, made last week.

Despite weak export demand, Anec also rose again its corn export estimates for Oct. estimate in week starting Oct. 17 was at 2.316mmt, 18% above 1.969mmt estimated previous week, but that is 49% below 4.534mmt of corn exported in Oct 2020.

Anec estimated that total Brazilian corn exports from January through October will be at 14.994 million mt, 39% below the 24.638 million mt exported the previous year in the corresponding 10-month period.

Meantime, traders reported that the higher US dollar levels against the Brazilian real have triggered strong farmer sales during the day and pressured premium levels in Brazil.

On the other hand, FOB Up River Argentina corn market was quiet with buyers on sidelines, concerned about issue of new export licenses from government and lack of demand overseas.

BAGE said 11,547 trucks loaded with corn moved to seaports in week ending Oct16.

That is 19% below week on week.

As for wheat, according to BCR mercados, Argentinian wheat crop could reach 20.7mmt.

On European market, we have seen a choppy session, with divergence between quotations for close and distant deliveries.

Wheat lacks energy to resume its bullish march while rapeseed will seek new records before 700 € / t.

Meantime, autumn sowing is accelerating in France thanks to favorable weather.

On the hother hand, the EU has exported 8.67 million tonnes of wheat since the start of the campaign as of October 17, compared with 6.38 million tonnes last year to date, trending 31% higher year-over-year.?

At a time when durum wheat prices jumped globally, it shoud to note that durum wheat exports from the EU, are trending 232,92%?higher year-over-year so far after reaching 183.587 t through October 17.

However these figures are sligthing below compared to 2019 season, when they reached 184.124 t.?

EU barley exports also are trending slightly higher year-over-year, with 2.738.329 t.

On the imports front, EU corn imports in 2021/22 are trending 21% lower year-over-year, with 3.917.826 t through October 17.

European Union soybean imports in 2021/22 moved to 3.616.175 t through October 17, which is moderately below the prior year’s pace so far.?

EU soymeal imports are also down year-over-year, with 4.38 million metric tons.

Rapeseed imports into the EU stand at 1.31 million tonnes against 2.05 last year to date.

From North Africa, due to insufficient rain, Algerian grain production in 2021/22 declined by 38 percent.?

As a result, grain imports are predicted to increase.?

While Algeria relies primarily on European wheat, German wheat is making gains at the expense of French wheat.?

Additionally, Algeria recently imported Russian wheat for the first time in five years, due to changes in Algeria’s import specifications.

Algeria 2021/22 wheat imports seen at 8 mln tonnes.

From the Black Sea basin, Ukrainian farms have harvested 52 million tonnes of grain from almost 73% of its sowing area, with the yield averaging 4.48 tonnes per hectare, the agriculture ministry said on Tuesday.

The volume includes 32.3 million tonnes of wheat, 9.6 million tonnes of barley, 6.9 million tonnes of corn and small volumes of other grains, the ministry said.

Favourable weather could help Ukraine to harvest a record 80.3 million tonnes of grain this year.?

In this context, Ukraine's agriculture ministry and its biggest grain traders have agreed to increase wheat export quota to 25.3 million tonnes for 2021/22 season from 17.5 million in 2020/21.

Meantime, Ukrainian farms had sown 5 million hectares of winter wheat for the 2022 harvest as of Oct 18, equating to 75% of the expected area of 6.68 million hectares.

Winter wheat accounts for 95% of Ukraine's total wheat sowing area.

The winter grain sowing area will also include 1.02 million hectares of winter barley and the sowing is 50% complete, the ministry said.

From Russia, Iran became Russia's largest grain importer, importing 3.7 mln tonnes of grain in the current agricultural year (July 1, 2021 - June 30, 2022), according to analytical company Prozerno.

Consequentially, in order to meet sustained demand, we are seeing to a further increase in wheat prices in both Ukraine and Russia especially for the close deliveries.?

On more distant deliveries the market stagnates, meantime.

As for corn, on the other hand, harvest pressure is starting to be felt with prices falling slightly.

From the Middle Kingdom, China’s real estate drama continues.?

Coal problems are also back in China’s headlines.??

There were large swings in futures yesterday.?

Markets spiked to new highs before collapsing on talk of price cuts.

On the other hand, according to the Chinese Ministry of Agriculture, 80% of the 2021 Chinese harvests have now been achieved and the minister is showing his pessimism about a possible rebound in pork prices, which does not seem to be a topical issue in the short term, according to his words.

Indeed, deterioration in grain quality could increase China’s corn import needs, which would likely favor US suppliers.?

Poor-quality corn could also be diverted to ethanol production, and could raise China’s animal feed prices.

Meantime, China's Sept soy imports from Brazil fall 18% y/y on flat demand.

From Australia, harvest is starting to pick up pace but still early days, and cash markets are continuing to chop along lightly as we look towards larger volumes moving with guidance from the overseas price moves.

Weather maps, meantime, remaining fairly dry into early November, with no more moisture on the latest runs.

Thus, Australia is set for a second consecutive bumper winter harvest, with total production forecast to come in just five per cent shy of last year’s near-record crop, according to Rabobank.

The specialist agribusiness bank, indeed, estimates the nation will harvest 52.87 million tonnes (Mt) of winter grains, oilseeds and pulses this season.

That is is still a hefty 25pc above the five-year average.

Canola is the stand-out mover, with production estimated to reach a new record of 5.16Mt (up 14pc on last year and a stellar 48pc above the five-year average), driven by increased planting and favourable growing conditions in many regions.

Australia’s wheat production is expected to come in at 31.9Mt (down 4pc on last year, but still 35pc above the five-year average).

Barley production is forecast to be down 10pc on last year to 11.7Mt, though also still up on the five-year average by 7pc.

Rabobank forecasts Australia’s total grain exports to increase again this year – by 5pc year on year (YOY) and to include 24.5Mt of wheat, 7.8Mt of barley and 4.3Mt of canola.

Internationally, Turkey’s TMO is tendering to buy 235,000t feed barley.

Japan issued a regular tender to purchase 80,000 t of food-quality wheat from the United States and Canada that closes on Thursday.

Of the total, 36% is expected to be sourced from the U.S. The grain is for arrival by the end of January.

We wish you a good day.