Daily International Grain Market View

US farm markets, took solid gains on Monday.

Once again the focus returned on war in Ukraine, harder and harder as the days pass.

Global supply concerns and on export optimism for U.S. grains, made additional support.

Thus, corn prices were up more then 2% by the close.

Soybeans gained around 1.25%.

Soymeal futures were also higher at the bell, going home with 1.13% gains.?

Soy oil was 1.6% higher at the close, with May and July contracts back above the 70 cents mark.

Wheat prices fared even better, with some contracts jumped more then 2.6%.

Indeed, Chicago wheat prices, climbed back above $10 per bushel also in the new crop, and posted between 2.6% to 3.4% gains.?

Kansas wheat ended the day 2.44 higher.?

Minneapolis wheat closed up by 1.85%.?

In energy markets, oil futures extended yesterday gains this morning as the United States and Europe planned new sanctions against Moscow over alleged war crimes, adding so to concerns about supply disruptions.

Japanese industry minister Koichi Hagiuda said the International Energy Agency (IEA) was still working out details for a planned second round of a coordinated oil releases.

Meantime, India's state run Mangalore Refinery and Petrochemicals Ltd. purchased 1 million barrels of Russian Urals for May loading, with a steep discount.

The steep discount for Russian Urals barrels has also created a buying opportunity for China to fill declining strategic reserves, according to Alex Sun, a managing consultant for Wood Mackenzie.

Meantime, Iran nuclear talks seems stalled.

Iran, indeed, blamed the United States for halting the talks.

Thus, Brent crude was up 90 cents, or 0.8%, to $108.43 a barrel at 08:01 GMT, and U.S. West Texas Intermediate was up 78 cents, or 0.8%, at $104.06 a barrel.

Global crude futures had settled up more than 3% on Monday.?

In the freight market, the Baltic Exchange’s dry bulk sea freight index fell for an eighth consecutive session yesterday, pulled down by lower rates in all vessel segments.

The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, indeed, fell 50 points to 2,307 points.

The panamax index dipped 58 points, or 1.9%, to 3,015 points.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, lost $525 to $27,135.

The capesize index fell 68 points, or 3.7%, to 1,796.

Average daily earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, increased $564 to $14,896.

The supramax index dropped 38 points to 2,717 points.

In equity markets, U.S. stock indexes on Monday posted moderate gains.??

Strength in technology stocks was supportive of the overall market.??

Apple rose 2.4% and Microsoft gained 1.8%.

Also, positive corporate and economic news was bullish for equities.?

Twitter surged 27.1% for the biggest gain in the S&P 500 after the company disclosed that Tesla's Elon Musk had taken a 9.2% stake in the social media platform.??

Monday’s U.S. economic data was bullish for stocks after U.S. Feb factory orders fell -0.5% m/m, slightly stronger than expectations of -0.6% m/m, and Feb factory orders ex-transportation rose +0.4% m/m, slightly stronger than expectations of +0.3% m/m.

The Fed is due to release minutes from its last meeting on Wednesday.

Meantime, the yield on the 10-year Treasury was at 2.40% early Tuesday, near its Monday close of 2.41%.

In this context, the S&P 500 rose 0.8% to 4,582.64, the Dow Jones Industrial Average gained 0.3 to 34,921.88, and the tech-heavy Nasdaq added 1.9% to 14,532.55.

Smaller company stocks also gained ground.?

The Russell 200 index picked up 0.2%, to 2,095.44.

Meantime, Asian stocks rose to their highest in more than a month on Tuesday, underpinned by the broad recovery on Wall Street.

Tokyo's Nikkei 225 index gained 0.2% to 27,787.98 and the Kospi in Seoul eked out a 0.1% gain, to 2,759.20.?

The S&P/ASX 200 gained 0.2% to 7,527.90.?

India's Sensex slipped 0.1%.?

Trading, however, was light.

Markets in mainland China and Hong Kong were closed for a public holiday.?

Shanghai went into a two-stage lockdown last week as authorities worked to contain the city's biggest ever COVID-19 outbreak.

Meantime, Russia - Ukraine war has elevated concerns about rising inflation and the impact on global economic growth.?

Prices for everything from food to clothing were already rising and the war has added to volatility for energy prices.

In this context, the World Bank has downgraded its 2022 growth forecast for the Asia-Pacific region to 5% from 5.4%, in part due to disruptions to supplies of commodities, financial strains and higher prices.?

That follows a rebound to 7.2% growth in 2021 after many economies experienced downturns with the onset of the pandemic.

Particularly, the World Bank anticipates that China, the region’s largest economy, will expand at a 5% annual pace, much slower than the 8.1% growth of 2021.

The report also forecasts a rising poverty in the Asia-Pacific region this year as “multiple shocks” compound troubles for people and for businesses.

In currency trading, the U.S. dollar slipped to 122.54 Japanese yen from 122.79 yen.?

The euro weakened to $1.0970 from $1.0976.

The dollar index on Monday rose by +0.367 (+0.37%).?

On the weather side, plenty more wet weather is on its way later this week, with most parts of the Midwest and Plains at least receiving some measurable moisture between today and Friday, per the latest 72-hour cumulative precipitation map from NOAA.?

The Mid-South and upper Midwest are likely to see the highest totals.?

Later on, NOAA’s 8-to-14-day outlook predicts more seasonally wet weather for the central U.S. between April 11 and April 17, with warmer-than-normal conditions likely for most areas east of the Mississippi River next week.

On the supply side, the U.S. Department of Agriculture, in its first weekly crop progress report for 2022, yesterday rated 30% of U.S. winter wheat in good to excellent condition, of which the Hard Red Winter wheat states' good-to-excellent ratings around to 23pc.?

Note that USDA categorises winter wheat as one, not as HRW and SRW.?

The good-to-excellent rating for SRW is about circa 55pc, but the states of Texas and Oklahoma ratings are a shocking 13pc and 17pc respectively.

The overall rating was below the lowest in a range of trade expectations and down from 53% a year ago.

Analysts, indeed, had expected the government to rate between 32% and 47% of the crop as good to excellent.?

The USDA also said 4% of the U.S. winter wheat crop had reached the heading phase of growth as of Sunday, ahead of the five-year average of 3% for this time of year.?

Meantime, the U.S. spring wheat crop was 3% planted, the government said, just ahead of the average trade expectation of 2% and the five-year average, also 2%.

The USDA also reported planting of the U.S. corn crop as 2% complete, matching the average analyst estimate as well as the five-year average.

That come from Texas being 54% planted, Kansas at 2%, Kentucky at 1%, and North Carolina at 3% planted.

Milo was 13% planted as of 4/3, with Texas planted on 43% of the expected area.

Meantime, several agriculture groups are urging USDA to consider unlocking acres tied up in the Conservation Resource Program (CRP) for shoring up potential global grain shortages.?

The discussion was addressed by the Secretary of the USDA, Tom Vilsack, saying that would not be a viable option.?

“CRP acres are disproportionately non-prime cropland, with more than 75pc of acres from less productive, non-prime farmland…additionally, a considerable proportion of currently enrolled CRP acres are in areas experiencing significant levels of drought,” Mr Vilsack said, in a letter to National Grain and Feed Association president and CEO Mike Seyfert.

On the demand side, Weekly Export Inspections data showed 1.528 MMT of corn was shipped during the week that ended 3/31.?

That was down from 1.614 MMT the week prior and was 632k MT below the same week last year.?

China was the week’s top destination.

Japan, Saudi Arabia, Mexico and South Korea rounded out the top five.

For the season through 3/31, weekly FAS data shows 30.567 MMT of corn has been shipped.?

That trails last year’s 36.17 MMT pace.?

Sorghum export inspections trended moderately below the prior week’s pace, with 283.656 t.?

That grain is bound for China, Sudan and Mexico.?

Cumulative totals for the 2021/22 marketing year are slightly behind last year’s pace, with 4.45 MMT.

As for soybean, the report showed 737,372 MT of soybeans were exported during the week of 3/31.?

That was up from 631k MT last week and from 385k MT during the same week last year.?

Unsurprisingly, China was again the No. 1 destination.

Egypt, Mexico, Indonesia and Japan filled out the top five.

USDA reported the marketing year’s total soy export as 44.169 MMT as of 3/31, compared to 54.654 MMT at the same point last year.

As for wheat, data showed 297,341 MT of wheat was exported during the week that ended 3/31.?

That was down 45,746 MT from last week and down 339,934 MT from the same week last year.?

The week’s export was mainly hard red spring wheat, with 42% of the total.?

Mexico led all destinations.

The Philippines, Taiwan, El Salvador and Nigeria rounded out the top five.

Accumulated wheat shipments reached 17.194 MMT as of 3/31.?

That trails last season’s pace by 3.79 MMT.?

Meantime, private exporters yesterday reported to the USDA sales of 1,084,000 metric tons of corn for delivery to China.??

Of the total, 676,000 metric tons is for delivery during the 2021/2022 marketing year and 408,000 metric tons is for delivery during the 2022/2023 marketing year.

In this context, corn basis bids were steady to mixed, after rising 3 to 4 cents higher at two ethanol plants and falling 2 to 4 cents lower at two other Midwestern locations.

Soybean basis bids were largely unchanged to star the week bud did tick a penny higher at an Indiana processor and drop 2 cents at an Ohio elevator.

The funds were net buyers yesterday for 14,500 lots of corn, 10,500 lots of soybeans and 13,500 lots of wheat.

From Soth America, StoneX raised their Brazilian corn output by 2.5 MMT to 118 MMT, citing a record second crop of 92.?

They have Brazil’s exports at 40 MMT, compared to USDA’s March forecast of 114 and 43 MMT respectively.?

USDA’s April S&Ds are scheduled for Friday.?

StoneX also raised their Brazilian soy output to 122 MMT, citing better yields in Mato Grosso.?

They have Brazilian exports at 76 MMT, compared to USDA’s March forecast of 85.5 MMT.?

USDA’s April S&Ds are scheduled for Friday.??

Meantime, leaders from Argentina's major transportation union said on Monday they will call for a national strike to demand an increase in grain freight rates, as higher fuel costs cause tensions throughout the industry.

Thus, in order to avoid further damage to the economy of its members, the transport union (Fe.Tr.A) calls for a national stoppage of activities from Monday, April 11.

Around 86% of soybean transportation to Argentina's ports is carried out by trucks, 13% by trains and the remaining 1% by ships.

The second quarter of the year is the time when the bulk of soybeans and corn are harvested, which last year recorded exports of close to $30.5 billion, including soy oil and meal shipments.

In Europe, Euronext wheat was mixed in light volumes, with nearby futures easing while new-crop positions rising on concerns over next season’s supply due to weather risks and the continuing conflict in Ukraine.

Thus, although May milling wheat settled down by 0.4%, at 363.75 euros ($399.29) a tonne, the new-crop September settled 2% higher at 335.75 euros.

Rapeseed, meantime, is firming up significantly in the 2022 harvest, as a result of the rise in all oil prices and fears of frost damage in recent days.?

In France, indeed, a cold snap that was threatening a repeat of large-scale losses in vineyards and fruit orchards seen a year ago, could have affected certain regions and crops such as winter barley or rapeseed, especially in the south-west of France.

However, was not expected to cause much damage to wheat crops, though a drier spell forecast for next week was keeping attention on soil moisture levels after a dry end to winter.

In Germany, it is the forecasts for next weekend that are raising fears with heavy snowfalls expected.

Meantime, a virtual halt to Ukrainian vegetable oil production and exports due to war with Russia may continue until June before gradually resuming from July, consultancy Strategie Grains said.

"Damage to industrial, logistics and port facilities is very significant in much of the east of the country".

Thus, the consultancy reduced its forecast of European Union imports of sunflower oil by nearly 800,000 tonnes to about 1.7 million tonnes for both 2021/22 and 2022/23, as about 90% usually come from Ukraine.

Also, the consultancy reduced its forecast of EU stocks of rapeseed at the end of the 2021/22 season in June to 700,000 tonnes from 800,000 tonnes.

In livestock feed products, the consultancy lowered its projection of EU imports of sunflower meal from Ukraine this season by nearly 400,000 tonnes to 604,000 tonnes.

It had made a downward revision of 230,000 tonnes in its previous report.

In the meantime, for next season, it raised projected EU sunflower seed output by 400,000 tonnes to 10.2 million tonnes.

Meanwhile, it kept its forecast of 2022/23 EU rapeseed production at 18.2 million tonnes, up about 7% on year.

From North Africa, Egypt has strategic wheat reserves sufficient for 2.6 months, cabinet spokesperson Nader Saad said on Monday.

He added that the country's strategic sugar reserves are sufficient for 5.6 months, while vegoils and rice reserves are enough for 5.9 months.

From the Black Sea basin, the Ukraine's ability to return to the export market seems increasingly remote.?

Ukrainian grain exports, indeed, were divided by four last month according to the Ministry of Agriculture, with in particular a 75% drop in wheat shipments (306 kt), while corn exports dropped by 72 % (1.07 Mt).

Meantime, private firm SovEcon expects Russian wheat shipments to reach 33.9 MMT, which is 400k MT above their prior estimate and compares to USDA’s March estimate of 32 MMT.?

Sovecon also estimates that the country’s wheat exports reached 2.2 MMT in March, which was the lowest monthly total since last July but still nearly double year-ago volumes.?

Meantime, Kazakhstan is considering temporarily limiting grain and flour exports after neighbour Russia banned grain exports, Agriculture Minister Yerbol Karashukeyev said on Monday.

He provided no detail of the possible limitations.?

Kazakhstan has used export quotas in the past.

The government of Uzbekistan, one of the key buyers of Kazakh grains, said on Monday it plans to buy up to 600,000 tonnes of grain from Kazakhstan and elsewhere to boost state stockpiles and ensure domestic food security as global food prices spike.

From South East Asia, India’s Minister for Commerce and Industry mentioned intentions to get India’s wheat exports to 10 MMT for 22/23, up from their record 7 MMT export program in 2020/21 and from USDA’s projected 8.5 MMT this season.?

India has officially exported a record amount of wheat for its 2021/22 fiscal year through March, shipping out an unprecedented 7,85 MMT.?

That’s far above last year’s tally of 2,1 MMT.?

India is typically not a major wheat exporter but has been able to capitalize on high prices in the wake of Russia - Ukraine war.

From Australia, canola was the only commodity to light up the board yesterday, as buyers raised their bids for nearby and for new crop.?

Planting progress on early long season crops gathers pace through NSW, Vic and WA with early grazing crops up and away through NSW.?

Growers in Victoria will start to ramp up the pace in the next week, starting on canola.

Barley values yesterday were unchanged, bid/offer spreads remaining wide.

Wheat liquidity was thin.?

Bids were softer and offers were sticky and unwilling to move lower.

Australian H2 price bids to growers presently for new crop are about $425/t.

Aussie Dollar firmed, pushing above .7540 and the RBA is expected to keep rates unchanged.

On the weather side, updated BOM 8-day run has built in slightly more moisture for SA with 10mm scattered for the 8-day and more moisture built in for Victoria too.

On the international trade scene, Saudi Arabia's main state wheat buying agency the Saudi Grains Organization (SAGO) has agreed to buy 625,000 tonnes of wheat in an international tender, SAGO said on Monday.

SAGO said it made the purchase at an average price of $422.47 a tonne.

That was up sharply from $365.14 a tonne c&f paid in SAGO's previous wheat tender in December.

The shipments will be delivered between September and November, the state grains importer said.

The tender had sought 355,000 tonnes of hard wheat with 12.5 percent protein content and closed on Friday.

Origins offered were the European Union, Black Sea region, North America, South America and Australia with the seller having the option of selecting the origin supplied, SAGO governor Ahmad Al-Fares added in a statement.

The shipments will be in 11 consignments distributed among four Saudi Arabian Sea ports.

SAGO said these purchases were made in Monday’s tender with arrival period in brackets:

Jeddah Sea Port:

- 63,000 tonnes from Holbud Limited at $414.26 C&F (Sept 10 - 25)

Yanbu Sea Port:

- 63,000 tonnes from Holbud Limited at $413.87 C&F (Sept. 15 - 30)

- 65,000 tonnes from Viterra at $423.10 C&F (Sept. 15 - 30)

- 63,000 tonnes from Holbud Limited at $414.35 C&F (Oct. 15 - 31)

- 60,000 tonnes from Olam at $419.90 C&F (Oct. 15 - 31)

- 65,000 tonnes from Viterra at $426.40 C&F (Oct. 15 - 31)

- 63,000 tonnes from Holbud Limited at $414.87 C&F (Nov. 10 - 25)

Dammam Sea Port:

- 65,000 tonnes from Viterra at $436.05 C&F (Sept. 10 - 25)

- 63,000 tonnes from Holbud Limited at $436.50 C&F (Sept. 10 - 25)

Jizan Sea Port:

- 55,000 tonnes from Holbud Limited at $425.00 C&F (Nov. 10 - 25).

Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 137,516 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on Thursday.

Details are as follows (in tonnes):

U.S. Western White, 12,525 t; U.S. Hard Red Winter (Semi Hard) 16,590 t; U.S.Hard Red Winter(Semi Hard) 16,890 t; U.S. Dark Northern Spring(protein minimum 14.0 pct) 13,994 t; Canada Western Red Spring (protein minimum 13.5 pct) 23,685 t; Canada Western Red Spring (protein minimum 13.5 pct) 25,422 t; Australia Standard White (West Australia) 28,410 t.

Bangladesh is considering offers in its international tender to purchase 49.000 t of wheat that closed yesterday.?

The grain is for shipment 40 days after a contract is signed.

That's all.

To all of you, I wish you a good day.

Author: Sandro F. Puglisi??

Make love ... not war ...

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