Daily International Grain Market View

US farm markets were very bullish, yesterday.

Increasing worries about a possible planting delays for corn and the anticipated Biden's ethanol remarks in Iowa, have seen corn market to trade by 1.54% higher, going to home with double digits gains.

With macro level CPI inflation data and spillover biofuel strength, the Tuesday soybean market closed with 0.9% gains.?

Soymeal was up 0.39%, meantime, while soy oil led the complex with 1.52% gains.?

The wheat complex trended significantly higher,?ending the Tuesday session with double digit gains.

Poor US winter wheat condition ratings?and concern from the ongoing war in Ukraine, indeed, led markets.

The spillover support from red-hot energy prices, made additional support for all ag commodity prices.?

In energy markets, oil prices started the session moderately lower on Wednesday, after China and Japan reported more then expected weak's economic data.

Particularly, China's crude oil imports slipped 14% from a year earlier.

China indeed imported 42.71 million tonnes last month, equivalent to 10.06 million barrels per day, data from the General Administration of Customs showed on Wednesday.

Japan reported its biggest monthly fall in core machinery orders in nearly two years in February, dragged down by a steep drop in demand from IT and other service firms.

Also, in the United States, crude stocks rose sharply last week while distillate and gasoline inventories dipped, according to the American Petroleum Institute figures.

The 7.8 million barrel rise in crude stocks for the week ended April 8 reported by API was more than the 900,000 barrels increase estimated by analysts.

The Energy Information Administration (EIA) will release weekly data at 10:30 a.m. EDT (1430 GMT) on Wednesday.

Thus, Brent crude futures was down 34 cents, or 0.3%, to $104.30 a barrel at 05:01 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell by 46 cents, or 0.5%, to $100.14 a barrel.?

Oil prices, however, has been underpinned on Tuesday by falling Russian oil and gas condensate production.

Also the warning from OPEC according which would be impossible to replace potential supply losses from Russia, pushed up oil prices.

Meantime, statements from Vladimir Putin that negotiations with Ukraine had reached a dead end, and comments from President Biden accusing Russia of genocide, reinforcing that the Ukraine Russia situation will not be deescalating anytime soon, edged up again oil prices.

Indeed, Brent crude rose 22 cents, or 0.2%, to $104.86 a barrel at 06:26 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 8 cents, or 0.1%, to $100.68 a barrel.?

The benchmarks had surged more than 6% on Tuesday.

In freight markets, the Baltic Exchange’s dry bulk sea freight index snapped a 13-session losing streak on Tuesday, as gains in panamax outweighed losses in the capesize and supramax segments.

The overall index, indeed, edged up 4 points, or about 0.2%, to 2,035 points.

Particularly, the panamax index climbed 77 points, or about 2.8% to 2,862 points.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, increased $700 to $25,763.

The capesize index slipped 27 points, or 1.9%, to 1,368 points, its lowest since early February.

Average daily earnings for capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, decreased by $218 to $11,348.

The supramax index dropped 25 points to 2,448 points.

In equity markets, U.S. stock indexes Tuesday erased an early rally and closed moderately lower.

U.S. stocks had carry-over a support from a rebound in Chinese stocks after China’s Shanghai Composite recovered from a 3-1/2 week low and settled higher.

Also, stocks had moved higher, as T-note yields fell -6.8 bp at 2.712% from a 3-1/4 year high of 2.832%, after the U.S. Mar core CPI rose less than expected.??

U.S. Mar CPI, indeed, rose +8.5% y/y, stronger than expectations of +8.4% y/y and the largest increase in 40 years.??

However, U.S. Mar CPI ex-food & energy rose +6.5% y/y, the fastest pace of increase in 39 years but slightly weaker than expectations of +6.6% y/y.

Meantime, stocks gave up their advance and turned lower, as the war in Ukraine may be prolonged after Russian President Putin said Tuesday that peace talks with Ukraine were “at a dead end,” and he vowed to continue the war.?

Thus, the S&P 500 fell 0.3% to 4,397.45 after having been up 1.3% earlier in the day.?

The Dow Jones Industrial Average and the Nasdaq composite each fell 0.3% after shedding early gains, closing to 34,220.36 and to 13,371.57 respectvely.

Smaller company stocks held up better than the broader market.?

The Russell 2000 rose 6.61 points, or 0.3%, to 1,986.94.

Meantime, Asian shares were mostly higher Wednesday on hopes that the curbs on U.S. interest rates may moderate after new data showed signs of slowing inflation.

Also, China will begin to come out of lockdowns soon, in spite we can't expect a return to rampant growth however.

Economic growth, indeed, slid to 4% over a year earlier in the final quarter of 2021, down from the full year's 8.1%.

However, China’s exports rose 15.7% over a year ago in March while imports were flat amid disruption due to coronavirus outbreaks.

Thus, Japan's benchmark Nikkei 225 jumped 1.9% to finish at 26,843.49.?

Australia's S&P/AS 200 added 0.3% to 7,479.00.?

South Korea's Kospi surged 1.9% to 2,716.60.?

Hong Kong's Hang Seng gained 0.3% to 21,382.96, while the Shanghai Composite shed 0.6% to 3,194.92.

In currency trading, the U.S. dollar edged up to 125.58 Japanese yen from 125.39 yen.

The euro cost $1.0830, little changed from $1.0832.

The dollar index on Tuesday rose by +0.346 (+0.35%).?

On the weather side, more rain and snow is coming to the central U.S. later this week, with the highest amounts likely along the Mississippi River corridor between today and Saturday, per the latest 72-hour cumulative precipitation map from NOAA.?

The agency’s new 8-to-14-day outlook predicts drier-than-normal conditions for part of the Central Plains between April 19 and April 25, with seasonally cool weather likely for the eastern half of the country.

On the demand side, president Biden announced that E15 ethanol will be permitted for sale at the pump during the summer (June 1 to September 15) as a way to help lower gasoline prices.?

E10 is sold year-round, but E15 has been limited in some markets during the summer due to vapor pressure at higher temps.?

Previously, the Trump administration had attempted to permanently allow E15 year-round, though the move failed in the courts.?

Roughly 2,300 stations have E15 pumps available in the U.S..?

As a result, in US corn demand for processing into ethanol increasing by something like 8-45Mbu.

In this context, corn basis bids were steady to mixed across the central U.S. on Tuesday, moving as much as 8 cents higher at an Illinois river terminal and as much as 5 cents lower at an Ohio elevator.

Soybean basis bids tilted 10 cents lower at an Ohio elevator and 5 cents higher at a Nebraska processor while holding steady across other Midwestern locations.

The funds were net buyers yesterday for 8,500 lots of corn, 7,500 lots of soybeans and 11,000 lots of wheat.

From Canada, according to Stats Canada, Canadian wheat exports during February were 1 million mt for an August-February total of 7.2 million mt.?

This is a 40% decline from last year.?

To meet AAFC’s 13.2 projection, monthly exports need to be 1.2 million mt for the remaining 5 months of the marketing year.?

This amount has only been accomplished twice (August and September) this year.?

Weekly export amounts, continue to be uninspiring as week 35 exports were just 188.7k mt, despite up from 171.3k mt a week ago.

As for durum, per lates data released by Stats Canada, total Canadian durum exports during February were 146.9k mt for a season total of 1.5 million mt, 45% of last year’s amount.?

Morocco remains Canada’s top durum customer, importing an August-February total of 343.7k mt of Canadian durum.

Weekly export durum amounts in week 35 were 53.6k mt, up from 40.9 the prior week.

From South America, Argentina truck transporters are on strike to protest diesel costs.?

Reports from the AgroEntregas suggested an 80% reduction in trucks to unload at the ports.?

Meantime, according to the USDA attaché, for next season is forecasts corn area to expand by one million hectares (ha), to a total of 22.5 million ha, and production to top 118 million metric tons (MMT).?

The wheat planted area will grow to 3.4 million ha, with production reaching nearly 9 MMT.?

The expansion for both commodities is forecast on rising global prices and demand, spiked by the armed conflict in the Black Sea region.?

Although Brazilian growers have room to expand planting, the big question is whether they will have enough fertilizer to do so.?

A reduction in inputs would also lead to lower yields, though the impact will be uneven across the country and will depend at least to an extent on climate.

In marketing year (MY) 2022/2023 USDA attaché forecasts Uruguay to increase its wheat area somewhat, but production and exports would be marginally lower than in the past two marketing years due lower expected yield.?

Corn area and production in MY 2022/2023 are forecast to reach record highs, but Uruguay would still need to import significant volumes of corn, mainly broken corn from Argentina.?

Sorghum area, production and domestic consumption in MY 2022/2023 are expected to continue at very low levels and with minimum changes.?

Uruguayan sorghum is expected to be soon declared eligible into the Chinese market, but brokers do not expect this to significantly affect trade in the short term.?

For marketing year (MY) 2022/23 according USDA attaché, Uruguayan projects continued expansion of soybean planted acreage to 1.225 million hectares (HA) and production of 2.8 million metric tons (MMT).?

Growth in area has been slower than anticipated due to strong competition by cattle and dairy producers for marginal land and less foreign investment than in the 2008-2014 expansionary period.?

MY 2021/22 yields are exceeding expectations due to well-timed rains, in contrast to the dry conditions that have plagued Uruguay’s neighbors.?

USDA attaché estimates MY 2021/22 production at 2.95 MMT, 930,000 MT above the USDA official estimate, based on both higher estimated planted area and yields.?

Rapeseed has rapidly emerged as a key winter oilseed in recent years with MY 2022/23 planted acreage projected at 205,000 HA and production of 316,000 MT.

Venezuelan agricultural imports grew by 33.1 percent in 2021 due to a stabilization of the economy and a recovery in consumer demand.?

Nevertheless, agricultural imports fell by 5.1 percent in volume due to significant commodity prices increases.?

Agricultural imports from the United States totaled $634 million last year, up 44.8 percent compared to 2020.?

The market has grown by more than 85 percent since 2019, and the products with the greatest growth potential are corn, rice, wheat, soybean meal, soybean oil, and sugar.

In Europe, new very strong rise in prices for all products, yesterday.

Farmers in France, are expected to cut back on wheat?sowing for this year's harvest but expand barley and rapeseed area, the country's farm ministry said on Tuesday.

For soft wheat, the ministry pegged the 2022 area, including a very small amount of spring crop, at 4.79 million hectares (mln ha), down 3.9% on 2021 and 0.7% below the average of the past five years.

Winter soft wheat sowings were revised up slightly to 4.77 mln ha, from a previous estimate of 4.75 mln ha in February that traders had considered rather low.

That was down nearly 400,000 hectares compared to last year and 11.6% below the 5-year average.

For spring barley, the area was seen rising 4.1% from last year to 553,000 ha.

Estimated winter barley sowing was kept unchanged from February at 1.25 mln ha, up 4.4%, giving an expected all-barley area of 1.81 mln ha, up 4.3%.

For rapeseed, the ministry estimated the 2022 area including a marginal amount of spring crop at 1.16 mln ha, up 18.4% from 2021, but still 6.7% below the five-year average.

Restrictions on the use of insecticides on this product are the main cause.

French crops have generally benefitted from moderate weather since autumn, with wheat and barley recording high ratings in farm office FranceAgriMer's weekly crop progress reports.

The ministry said its area estimates were based on data as of April 1.

For corn and sunflower seed, the ministry is due to give first area estimates next month.

On the other hand, Germany's 2022 wheat crop of all types will increase 6.2% on the year to 22.70 million tonnes, the country's association of farm cooperatives said in its second harvest estimate on Wednesday.

The association forecast Germany's 2022 winter rapeseed crop will rise 11.1% from last summer’s crop to 3.88 million tonnes.

In its first forecast in March, the association had estimated Germany’s wheat crop this summer at 22.61 million tonnes and the winter rapeseed crop at 3.90 million tonnes.

German grains had overall developed well after mild winter weather and had benefited from a rainy start to April, the association said.

Sowings of spring grains has generally progressed well.

The winter barley crop, mostly used for animal feed, will be little changed, up 0.1% on the year to 8.89 million tonnes despite a reduction in sowings, the association said.

The spring barley crop, used for beer and malt production, will increase 15.2% after an expansion of sowings to 1.74 million tonnes.

The?corn crop will fall 2.8% to 4.31 million tonnes because of an expected yield reduction.

Meantime, soft wheat exports from the European Union in the 2021/22 season that started in July had reached 20.63 million tonnes by April 10, according to data published on Tuesday by the European Commission.

That compared with 21.42 million tonnes by the same week in 2020/21, the data showed.

EU 2021/22 barley exports had reached 6.14 million tonnes, against 6.40 million a year ago, while EU corn imports were at 12.61 million tonnes, against 12.45 million.

European Union soybean imports during the 2021/22 marketing year have reached 10.85 MMT through April 10, which is still slightly behind last year’s pace so far.?

EU soymeal imports are also slightly down year-over-year, with 12.74 million metric tons.

Ditto for EU rapeseed imports now at 4 MMT vs. 5.32 MMT year ago.

Meantime, European sunflower oil prices have fallen sharply in the past two weeks, the head of Hamburg-based oilseeds analysts Oil World said on Tuesday.

Ukrainian sunoil, indeed, is returning to the market, offered for sale at about $1,900 to $2,250 a tonne for April/June delivery with export by truck or train via Moldavia, Romania, Poland and other neighbouring countries.

EU sunoil prices surged to around $2,900 to $3,000 a tonne in mid March, up from about $1,490 a tonne on average in February.

“Russian sellers are offering sunoil and other agricultural commodities at price discounts on the world market.

“In the first week of April, Russian sunoil was offered at $1,800 to $1,900 a tonne fob or even lower."

Likely, this is a reflection of the demand destruction done by the unusually high prices in the first half of March.

But physical supplies of sunflower oil will remain relatively tight in the EU.

In the meantime, EU sunflower seed crushings are rising more sharply than expected and are estimated to reach 9.3 to 9.4 million tonnes in the season between August 2021 and July 2022, compared with 8.0 tonnes in the previous season.?

“The biggest increases are in Romania, Bulgaria, France, Hungary and Spain.”

From Levant, Lebanon's government has agreed to disburse $15 million to temporarily resolve growing bread shortages in the country, Economy Minister Amin Salam said.

However, the funds should only last a few weeks.

The government is seeking a $150 million agreement with the World Bank to improve food security.

Meantime, long lines had begun forming outside bakeries.

On this wake, The EU is providing financial support to the most vulnerable nations, last week announcing 225 million euros ($244 million) in aid to North Africa and the Middle East.

Nearly half of this will be directed to Egypt, while Lebanon, Jordan, Tunisia, Morocco and the Palestinian Authority are to receive emergency funds of between 15 and 25 million euros each.

Another 300 million euros in agriculture support is to be provided to Western Balkan countries, as part of regular EU funding to the region, with Serbia considered of concern because of intensive Russian communications there, EU officials said.

From the Black Sea basin, according to APK-Inform, the indicative export prices of new-crop wheat with 12.5% protein decreased in Ukraine last week to 320-340 USD/t FOB.

The offer prices of Russian wheat were somewhat lower.

The absence of new deals, growing freight rates, lower demand from importers and hopes for end of the war before the new season begins pressured the prices.?

Good condition of winter wheat, progress of spring planting and forecast of favorable weather as well as high stocks of wheat amid tiny export in March weighted on the prices too.?

The Ministry of Agrarian Policy informed that Ukraine had exported 309 thsd tonnes of wheat in March compared to 1.04 mln tonnes in February.

Ditto for export prices of Ukrainian corn on western land borders.

The bid/offer prices of corn for delivery in April-May totaled 230-240/240-250 USD/t DAP Izov (Poland), down 10-15 USD/t the week ago.?

The bid/offer prices of corn decreased to 245-260/255-270 USD/t DAP Chop (Slovakia).?

The delivery to the port of Constanta (Romania) totaled 300-315/310-320 USD/t.?

The bid/offer prices of corn declined to 245-250/250-260 USD/t DAP Mohyliv-Podilskyi (Moldova).

The surplus of the supply over the demand amid the absence of shipments through seaports, the logistic difficulties as well as the limited capacity of land exports and large stocks of corn were the key bearish factors.?

The indicative export prices of Ukrainian barley both old and new crops were also decreasing.

By the end of the last week, the indicative offer prices of old-crop barley had decreased by 15 USD/t to 370-395 USD/t FOB (April-May).?

It was average 5 USD/t higher compared to the prices of 12.5% wheat. The offer prices of new-crop barley totaled 330-350 USD/t FOB (July-August), up by 10 USD/t compared to the forward prices of 12.5% wheat.

The key price determining factors were similar to those on the wheat and corn market.?

However, unlike on the other markets, the stocks of barley are low in Ukraine.?

As a result, the prices of feed barley exceeded those of milling wheat.

Meantime, on April 10, the Minister of Agriculture of Lithuania has meet with its counterpart Ukrainian.

Primary, the ministers discussed the use of logistical possibilities of Lithuania for exports of Ukrainian grain to the traditional markets of Africa, Asia and the Middle East.

The transport authorities of Lithuania are working on sending a test train from Ukraine with a volume of 2 thsd tonnes in the near future.?

Meantime, Ukraine’s AgroConsult reported 100 fully loaded grain vessels are stuck at port there due to the ongoing war with Russia.?

From the Middle Kingdom, China imported fewer soybeans in March than a year earlier, customs data showed on Wednesday, as bad weather delayed exports from Brazil and poor crush margins curbed demand.

China, indeed, brought in 6.35 million tonnes of the oilseed in March, down 18% from 7.77 million tonnes in March 2021, General Administration of Customs data showed.

Arriving shipments in the first three months of the year were down 4.2% from a year earlier, at 20.28 million tonnes, according to the data.

Board crush margins for soybeans for delivery in the period from May to July were around minus 200 yuan to minus 300 yuan (minus $31 to minus $47) per tonne, discouraging buying for future delivery.

Farmers nationwide are losing 300 yuan to 600 yuan for each pig raised, which on soymeal demand.

Meantime, Beijing has been releasing soybeans from state reserves, increasing supply of the oilseed.

That move, coupled with market expectations of more soybean arrivals in coming months, has helped cool soymeal prices, though they have climbed back up in the past few days.

Meantime, China's imports of vegetable oils from January to March plunged 62.8% from a year earlier, to 1.047 million tonnes.?

March imports were 307,000 tonnes, down 61%, customs data also showed.

($1=6.3657 Chinese yuan renminbi).

Meantime, planting of corn in one of China's major producing areas could be delayed as many of the region's millions of farmers struggle to return home from temporary city jobs because of strict coronavirus lockdowns.

China's northeastern provinces, its bread basket, have endured weeks of restrictions on movement.

Smallholder farmers in China typically take manual jobs in cities over the winter months when farming activity stops.

Any delay to planting could hit corn output, where corn prices are already hovering at record levels, and government support for soybeans also threatens to reduce growing of the grain.

Fertiliser supplies to the region have also been disrupted by the transport curbs, and farmers are already facing record prices of the crop nutrient as well as diesel and other costs.

From India, India’s palm oil imports jumped 18.7% in March from the previous month.

In March, indeed, 539,793 tonnes of palm oil landed in India, up from 454,794 tonnes in February, the Solvent Extractors’ Association of India (SEA) said in a statement.

India imported 212,484 tonnes of sunflower oil in March, up from 152,220 tonnes in February.

“However in April, as no shipment from Ukraine came, sunflower oil import may fall to nearly 80,000 tonnes, mainly arriving from Russia and Argentina only”.

India, indeed, has contracted for 45,000 tonnes of Russian sunflower oil at a record high price for shipments in April.

The country’s soy oil imports in March fell to 299,421 tonnes from 376,594 tonnes a month ago, the SEA said.

India has imported a record 112,576 tonnes of soyoil from the United States in the first five months of the current 2021/22 marketing year ending on Oct. 31, the SEA data showed.

As sunoil and soyoil supplies are limited, India has no choice but to import more than 600,000 tonnes of palm oil in April, according to some traders.

From Australia, Australia exported 38,887 tonnes of malting barley, 796,193t of feed barley and 89,626t of sorghum in February, according to the latest data from the Australian Bureau of Statistics (ABS).

The malting figure is down 47 per cent from the 73,447t exported in January, while feed barley exports are up 46pc from the 545,956t shipped in January.

The sorghum figure is close to quadruple the 23,894t exported in January, and indicates the arrival of new-crop sorghum shipped primarily in bulk and containers out of Brisbane.

Meantime, local wheat, barley and canola markets came alive yesterday, booking stronger values across the board.?

Current crop wheat lifted $3-5/t and new crop wheat firmed $5-10/t. Canola current crop firmed $15/t in WA and eastern Australian new crop firmed $15-20/t.

April vessel lineups continued to build with 4.2Mt on the stem nationally.?

The May lineup already has >1Mt on the WA stem.?

Wait times have improved in Esperance, Geraldton and Newcastle this week, but are worse in Port Kembla and Albany.?

The situation in most other ports is unchanged, meaning congestion is above normal at Geelong, Kwinana and Brisbane with 2-3 week waiting times.

On the weather side, we have seen welcome rain in the past 2 days for Western Australia cropping regions especially in Esperance zone and parts of the Albany zone, with most receiving 25mm+.?

These falls make a great start to the 22/23 cropping season, and more forecast over the next 5-8 days.

On international trade scene, Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday it would seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by July 31 and arrive in Japan by Sept. 29, via a simultaneous buy and sell (SBS) auction that will be held on April 20.

Egypt’s GASC issued an international wheat tender for a subset of mostly EU countries on their tender list.?

Offers are being accepted from Russia, Bulgaria, Hungary, Kazakhstan, Ukraine, France, Germany, Poland, Romania, Serbia and Latvia.?

Results are expected late on Wednesday.?

Arrival for C&F offers is to be June 1-15.?

Algeria is also on the market for wheat.?

That's all.

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

Author: Sandro F. Puglisi??

Make love ... not war ...

?

To read more, register on?

https://platform.bancadelgrano.it