December 17, 2024 - Newswires

Corn and soybeans seesawed, due an uptick fund buying interest against the prospect of a South American bumper crops. Wheat fell on a weaker export demand ...

Good morning, Farmer Family ...

US farm markets ended mixed on Monday.

Corn prices rose 0.68%,

Soybeans fell 0.63%.

The rest of the soy complex was mixed as soymeal picked up 0.24%, while soyoil slumped 2.09% lower.

Wheat prices ended mixed, mostly higher, as Chicago SRW dipped 0.41%, while Kansas City HRW rose 0.4%, and Minneapolis spring wheat moved 0.25% higher.

• Corn and soybeans seesawed, as market players weighed an uptick in fund buying interest against the prospect of a bumper South American corn and soy crops.
• Favorable South American crop conditions and a lack of weather threats have pressured corn and soy prices.
• Corn and soybean-growing areas of South America were expected to receive showers over the next two weeks that would aid crop development.
• However, both crops have received support from bargain buying after price falls late last week.
• The weekly Export Inspections report from the USDA indeed showed 1.13 MMT in shipments during the week that ended on December 12.
• That was a 17.7% increase from the same week last year and 6.79% above the previous week. That took the marketing year shipments to 13.3 MMT, up 31% from last year.
• For soybeans, Export Inspections data showed 1.676 MMT in soybean shipments during the week that ended on December 12.
• That was down 3.5% from the previous week but up 17.6% from the same week last year.
• Marketing year to date shipments are now at 25.23 MMT, which is now 19.1% above the same week in 2023.
• Meantime, the National Oilseed Processors Association reported the U.S. crush declined in November from an all-time high a month earlier and fell short of most trade estimates.
• Notably, NOPA data showed 193.185 mbu of soybeans were crushed during November coming shy of the trade estimates at 196.713 mbu.
• That was up 2.19% from last year and a November record, but down 3.38% from a month earlier.
• Stocks were building this month, up 1.47% from a year ago at 1.08 billion lbs.
• That dragged down both soybeans and soyoil.
• However, losses in the soybean complex were limited as the crush was still the largest November on record and fourth-largest for any month.
• Also, soyoil stocks were still 10.6% below last year and short of the estimated 1.123 billion lbs.
• Thin trade volume ahead of the Christmas holiday have kept corn and soybeans stuck in a rangebound trade.
• Wheat prices ended mixed, with Chicago ending lower on weaker export demand.
• Weekly Export Inspection data from the USDA, however, showed a total of 298,075 MT of wheat shipped during the week of 12/12.
• That was an increase of 20.2% from last week and 4.66% above the same week last year.
• The full year marketing shipments were 11.537 MMT, which was up 29.41% from a year ago.
• As a result, K.C. March hard red winter wheat and MPLS spring wheat settled up, gaining more support from commodity fund buying.
• Also, a hefty wheat purchase by Saudi Arabia, supported prices.
• Although the United States is not expected to supply the wheat, the large purchase takes a hefty chunk of the grain out of the market.
• Dryness building in wheat-growing areas of the Central and Southern Plains also underpinned the market.
• Wheat-growing areas of the Southern Plains are indeed expected to be drier this week, but chances are more favorable for precipitation next week, according to analysts.

In this context ...

Basis bids for U.S. corn were steady to up while soy bids were steady to down at river terminals in the U.S. Midwest.

• Notably, the corn basis was 5 cents higher at a river terminal in Toledo, Ohio and 1 cent higher at another in Davenport, Iowa.
• The soy basis lost 5 cents at the river terminal in Davenport.
• Spot basis bids for hard red winter wheat were unchanged in the U.S. Plains, as farmer selling was light and demand was subdued.
• Commodity funds were net sellers of CBOT soybeans, soyoil and wheat futures contracts, but net buyers of corn.

This morning ...

Chicago soybeans edged higher. Corn prices also rose, while wheat fell.

• Notably, the most-active soybean contract on the Chicago Board of Trade had risen 0.2% by 0311 GMT, corn gained 0.1%, while wheat shed 0.2%.

South America

Brazilian consultancy AgRural reported that the country’s 2024/25 soybean plantings are essentially complete, and offered a production estimate of 171.5 million metric tons.

• That is one of the more bullish estimates on record so far.
• That would also be a record-breaking effort, if realized.
• Recent rains have provided favorable crop development conditions in most of the country, AgRural said.
• A revised figured will likely to be released in late January when harvesting is underway.
• AgRural’s estimate for the Brazilian corn crop is 121.7 MMT, which is well shy of the 127 from USDA.

Europe

European grain markets ended mixed, mostly higher.

• Notably, March wheat, the most active position on Paris-based Euronext, closed up 1.5% at 233 euros ($244.84) a metric ton, after reaching its highest since Oct. 25 at 234.00 euros.
• MATIF corn Mar contract ended up €1.25/t to €208/t, while Feb rapeseed dropped €5.25/t to €541.75/t.
• Wheat prices rose to a seven-week high, supported by a large purchase by Saudi Arabia in a tender seen as indicating competition from Russia may be ebbing.
• The recent Saudi tender indeed was thought to be filled by the Bulgaria, Romania, Ukraine and Argentina.
• Russia might have squeezed one or two cargos in there, but steps by Russia's government to regulate exports, have fuelled expectations that shipments will slow, shifting demand towards other suppliers like the EU.
• On this wake, Matif wheat outperformed both US exchanges and Russian cash.
• Traders also noted news that Morocco will maintain import subsidies, confirming the high import requirement.
• Meantime, per latest report from the EU's crop monitoring service, cereal fields in Europe are generally in good condition.
• Notably, the MARS service said in its December update that drier weather allowed farmers to wrap up sowing in western Europe despite delays.
• In central and northern Europe, mild cold spells had no negative impact and soil water reserves remained well above critical levels, MARS said.
• There were greater risks, however, in a swathe of the Black Sea rim spanning parts of European Union members Romania and Bulgaria, as well as areas of Ukraine and Russia.
• "Sowing and initial development of winter wheat were seriously hampered due to very dry topsoils, resulting in crops that are currently underdeveloped and in poor condition," MARS said.
• Crops elsewhere in Europe were also lacking sturdiness for winter, notably in Poland and the Baltic States, though forecasts showed no severe cold in the coming days while longer-range projections suggested warmer than usual temperatures overall in Europe this winter, MARS said.
• In Sicily, an important region for durum wheat cultivation, a lack of soil moisture remained a concern, despite rain in recent weeks that allowed sowing to proceed.
• Across the Mediterranean, there was "immediate need" for rain in the Maghreb to help sowing, especially in Morocco and western Algeria, MARS said.

• In oilseeds, February rapeseed closed down 0.8%, after last week's rally triggered by Euronext's announcement that it was suspending February delivery to French river ports after an accident in Germany blocked cross-border shipping.
• However, news from German navigation authorities that had started clearing blocked vessels, encouraged profit-taking amid broad weakness in oilseeds.
• The price differences between the different deadlines are doomed to uncertainty and the progress of the work is followed with interest.
• In other news, the political uncertainty animating Europe is also in the spotlight.
• The formation of the Bayrou government in France is at the beginning of this week overshadowed by the vote of confidence of the German deputies, who disapproved Olaf Scholz.
• That not help the stability, and is generating economic concerns in the medium term.
• As a result, the euro/dollar parity remained close to 1.05.

North Africa

Morocco will keep giving subsidies for milling wheat imports until the end of April 2025, state grains agency ONICL said.

• The decision to extend the subsidy scheme that was due to end in December was made by Morocco's finance and agriculture ministries.
• That suggest the country will continue to import wheat as drought hits the domestic supply, this season.
• The prolonging of the subsidy scheme will potentially maintain a steady flow of supply for millers until the next local harvest.

Ukraine

According to operational data of the State Customs Service, as of December 16, Ukraine has exported 19.51 mln tonnes of grain and leguminous crops since the beginning of the 2024/25 MY, of which 1.135 tonnes have been shipped since the beginning of the current month.

• In particular, since the beginning of the current season the country exported wheat for 9.207 mln tonnes, barley for 1.899 mln tonnes, and corn for 8.084 mln tonnes.
• Total exports of Ukrainian flour since the beginning of the season as of December 16 are estimated at 35.2 thousand tonnes, including wheat flour at 32.2 thousand tonnes.
• For oilseeds, the rate of sunflower oil exports since the beginning of December decreased by 19% against November, amounting to 165 thousand tonnes (as of 12.12).
• In this context, sunflower market moved in different directions.
• Notably, prices for sunflower oil continued to decline, while the supply of sunflower remained extremely limited, which did not allow processors to significantly reduce purchase prices.
• In a number of cases companies reduced demand prices by 200 UAH/t on average, but in fact continued to purchase raw materials at prices in the previously formed range - from 25000 UAH/t CPT and higher.
• Also, many processors were ready to pay extra for large volumes of oilseed and quick delivery.
• For rapeseed, the number of buyers continued to decrease, and the pace of trading activity remained moderate due to seasonal depletion of free stocks at agricultural producers.
• Domestic rapeseed processing also remained minimal.
• As a result, the domestic rapeseed market was without significant changes.
• Official demand prices of companies fluctuated within the previously established range during last week, while for large volumes purchase prices were discussed individually.

Russia

Wheat growing conditions in Russia where the mercury is dropping rapidly are watched closely.

• A precise assessment will be necessary at the end of winter, but it is clear that the start of the cycle is far from optimal, as highlighted by different analysts.
• Meantime, Sovecon estimated that Russia wheat exports will reach 3.5 MMT in December.
• That would be a monthly decline of 14.6% and the lowest monthly tally in more than a year, if realized.
• Weekly grain exports were estimated at 0.97 million metric tons, including 0.92 million tons of wheat, down from 1.08 million tons of grain and 1.01 million tons of wheat the previous week.
• Weather conditions in Black Sea and Sea of Azov ports were difficult for navigation, in this period.
• However, Sovecon also noted that farmers were reluctant to sell at the end of the year and were deferring sales to next year to minimize their tax costs.
• As a result, Russian wheat export prices rose last week
• Notably, according to the IKAR the price of Russian wheat with 12.5% protein for free-on-board (FOB) delivery in late December to early January increased by $6 to $234 per metric ton, last week.
• Sovecon said prices for Russian wheat with the same protein content and delivery terms were $227 to $232 per ton, compared with $225 to $229 the previous week.

Southeast Asia

Malaysia

Malaysian palm oil prices closed lower, for a second straight session.

• Notably, the Bursa Malaysia Derivatives Exchange’s benchmark contract fell 1.2% by the close.
• Crude palm oil futures had opened lower and recovered earlier at the midday break.
• The ringgit weakened 0.07% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
• Bargain buying following the steadiness seen in competing oils, especially soyoil and rapeseed oil, also supported the market.
• Meantime, the Dalian Commodity Exchange’s most-active soyoil contract fell 0.08%, while its palm oil contract added 0.58%.
• Losses in rival soyoils, and profit takings dragged down the market.
• Weaker crude oil futures made palm a less attractive option for biodiesel feedstock.
• Also, cargo surveyors estimated that Malaysian palm oil exports fell between 6.7% and 9.8% during the Dec. 1-15 period.

Australia

After harvest delays due rains in the southern growing belt of Australia, now is the extreme fire danger to ban harvest.

• A big chunk of Vic indeed will be off the tools today with the heat moving through NSW as well.
• The next week looks hot and dry for most regions where harvest is still ongoing, which should help ensure most areas are finished by Christmas this year.
• Unfortunately, the same can’t be said for the Gabba with another stop/start day on the cards and a draw looking likely.
• Meantime, canola bids started the week working higher to be bid around A$880 in Western Australia, with the spread to GM at $140, representing the largest spread over the last 2 years.
• Wheat bids were up $3 to be bid at $380, while barley moved down by $3 to be bid at $322.
• In the east of the country, canola was well bid to begin the week, moving $7 higher with bids around $803.
• Cereal bids were largely unchanged to begin the week.
• Up-country end-user homes in South Australia continued to represent a $20-$40 premium to local depots, with wheat into Murray Bridge and Wasleys bid around $360 and barley into the Mid North at $320, as consumers work to shore up supply.

International grain and oilseed tenders & trade

• South Korea's Feed Leaders Committee (FLC) has issued a tender to purchase 52,000 to 69,000 metric tons of corn sourced from optional origins. The deadline for submission of price offers in the tender is today, Dec. 17, and arrival in South Korea is sought in one consignment around March 20, 2025. Shipment is sought between Feb. 5 and March 5 if sourced from the U.S. Pacific Northwest coast, between Jan. 16 and Feb. 14 if sourced from the U.S. Gulf, between Jan. 11 and Feb. 9 if from South America or between Jan. 21 and Feb. 19 if from South Africa. Black Sea/European corn was not listed among origins but is believed that it could be offered and could be bought if cheapest. Price offers were sought in both per ton cost and freight (c&f) included and at a premium over the Chicago March corn contract.
• Algeria's state grains agency OAIC has issued an international tender to purchase a nominal 50,000 metric tons of durum wheat. The deadline for submissions of price offers in the tender is Dec. 18 with offers having to remain valid until Dec. 19.
• Jordan's state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat that can be sourced from optional origins. The deadline for submission of price offers in the tender is Dec. 17.
• Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley to be loaded by Feb. 7 and arrive in Japan by March 6, via a simultaneous buy and sell (SBS) auction that will be held on Dec. 18.
• Jordan's state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley. The deadline for submission of price offers in the tender is Dec. 18.

Outside markets ...

Energy markets

Oil prices slipped, after hitting highest levels in several weeks.

• Notably, Brent crude futures settled 0.8% lower, after settling on Friday at their highest since Nov. 22.
• U.S. West Texas Intermediate crude also shed 0.8%, after registering its highest close since Nov. 7.
• Weakness in Chinese consumer spending weighed over the market.
• Also, investors paused buying ahead of the U.S. Federal Reserve's interest rate decision.
• Last week, oil benefited from the expectation that supply would tighten with additional sanctions on crude producers Russia and Iran, while possible lower interest rates in the U.S. and Europe would spur demand.
• However, Chinese retail sales were slower than expected.
• The Chinese outlook contributed the decision by oil producer group OPEC+ to postpone plans for higher output until April.
• Meantime, the Fed is expected to cut interest rates by a quarter of a percentage point at its Dec. 17-18 meeting, which will also provide an updated look at how much further Fed officials think they will reduce rates in 2025 and perhaps into 2026.
• But oil prices were further pressured by the U.S. dollar, which briefly hovered close to a three-week high versus other major currencies, ahead of the week of central bank meetings.

This morning, oil prices eased further.

• U.S. West Texas Intermediate crude was down 11 cents at $70.60 a barrel at 0409 GMT, while Brent crude futures fell 6 cents to $73.85 a barrel.
• On Monday, the European Commission announced a 15th package of EU sanctions against Russia, including tougher measures against Chinese entities.
• However, the new EU sanctions are unlikely to translate to "real" disruption as most flows now do not use Western services, so they will not be disrupted, analysts said.

Ocean freight markets

The Baltic Exchange's main sea freight index rose about 1.9%, snapping a four-day losing streak.

• Notably, the main index rose 20 points to 1,071 points.
• The capesize index gained 77 points to 1,340 points.
• Meanwhile, the panamax index fell 18 points, hitting its lowest level since July 2023 at 977 points.
• The supramax index eased 4 points to its lowest since August last year at 955 points.

Equity markets

US stock indexes settled mixed.

• The Dow Jones Industrial Average gave up 0.3%, the S&P 500 rose 0.4%, and the Nasdaq composite climbed 1.2% to a record close of 20,173.89.
• Broadcom leaped 11.2%, Micron Technology closed up more than +5%.
• Conversely, and weighing on the Dow Jones Industrials, health insurance stocks retreated after President-elect Trump said he plans to “knock out” drug-industry middlemen.
• Meantime, US economic news was mixed.
• The Dec Empire manufacturing survey general business conditions fell -31.0 to 0.2.
• The Dec S&P manufacturing PMI fell -1.4 to 48.3.
• The Dec S&P services PMI rose +2.4 to 58.5.
• The 10-year T-note yield was unchanged at 4.397%.
• Bitcoin rallied more than +4% to a new record high on President-elect Trump’s support for digital assets.
• The FOMC is expected to cut the fed funds target range by -25 bp after the Tue/Wed policy meeting.
• In Europe, the Euro Stoxx 50 closed down -0.42%.
• The Eurozone Dec S&P manufacturing PMI was unchanged at 45.2.
• The Dec composite PMI unexpectedly rose +1.2 to 49.5.
• Eurozone Q3 labor costs eased to +4.6% from +5.2% in Q2.
• ECB President Lagarde said, "If the incoming data continue to confirm our baseline, the direction of travel is clear, and we expect to lower interest rates further."
• Moody’s Ratings cut France’s credit rating to Aa3 from Aa2, saying the decision “reflects our views that France’s public finances will be substantially weakened over the coming years.”
• In China, the Shanghai Composite Index fell to a 1-week low and closed down -0.16%.
• China Nov new home prices fell -0.2% m/m, the eighteenth consecutive month new home prices have fallen.
• Also, China Nov retail sales rose +3.0% y/y, weaker than expectations of +5.0% y/y.
• In Japan, the Nikkei Stock 225 Index closed down -0.03%.
• Japan Oct core machine orders rose +2.1% m/m.
• The Japan Dec Jibun Bank manufacturing PMI rose +0.5 to 49.5.
• The Dec Jibun Bank services PMI rose +0.9 to 51.4.
• The Japan Oct tertiary industry index rose +0.3% m/m.

This morning, shares mostly fell in Asian trading.

• Tokyo's benchmark Nikkei 225 index lost 0.2%, Hong Kong's Hang Seng index eased 0.1%, the Shanghai Composite index shed 0.7%, South Korea's Kospi sank 1.3%, Australia's S&P/ASX 200 gained 0.8%, the Taiex in Taiwan fell 0.1% while the Bangkok's SET dropped 0.8%.
• Chinese markets slid further, as recent disappointing data continued to pressure domestic policymakers to intensify their policy stimulus.
• South Korean authorities were pushing to summon impeached President Yoon Suk Yeol for questioning over his short-lived martial law decree of last week.
• SoftBank's Tokyo-listed shares jumped 4.4%, after CEO Masayoshi Son joined President-elect Donald Trump in announcing plans Monday by the Japanese technology and telecoms giant to invest $100 billion in U.S. projects over the next four years.
• Gains in Japanese technology shares, limited losses.
• On Wednesday, the Federal Reserve will announce its last move on interest rates for the year.

Currency trading

The dollar index fell.

• Strength in stocks curbed liquidity demand for the dollar.
• Losses, however, were contained after T-note yields moved higher and strengthened the dollar’s interest rate differentials.
• US economic news was mixed for the dollar.
• The US Dec Empire manufacturing survey of general business conditions, was weaker than expectations.
• The US Dec S&P manufacturing PMI also was weaker than expectations.
• However, the Dec S&P services PMI was stronger than expectations.
• Meantime, the EUR/USD rose, as the euro recovered from early losses and closed higher.
• The euro initially moved lower after Moody’s Ratings cut France’s credit rating.
• Also, dovish comments from ECB President Lagarde weighed on the euro.
• Eurozone economic news was mixed for the euro as the Eurozone Dec S&P manufacturing PMI was unchanged, and the Dec S&P composite PMI unexpectedly increased.
• On the other hand, the USD/JPY rose, as the yen slid to a 2-1/2 week low against the dollar, falling for the six sessions in a row.
• Japan Oct core machine orders were stronger than expectations.
• The Japan Oct tertiary industry index also was stronger than expectations.
• The Japan Dec Jibun Bank manufacturing PMI rose, as well as the Dec Jibun Bank services PMI.

This morning, the U.S. dollar fell to 154.07 Japanese yen from 154.14 yen. The euro fell to $1.0509 from $1.0513.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Mar contract was down 2.2c/bu to 550c/bu;
• Kansas wheat Mar contract was up 2.2c/bu to 559.2c/bu;
• Minneapolis wheat Dec contract was up 1.4c/bu to 600c/bu;

• MATIF wheat Mar was up €4/t to €233.5/t;

• ASX wheat Jan '25 contract was down A$2.7/t to A$323.3/t;
• US DWI Cash (durum wheat index) was down 1.27c/bu to 646.47/bu;

• 1CWAD (Canadian durum) avg spot price was not available. Available prices were NW SASK at C$315.11/t (+C$0.52/t); SW SASK at C$317.36/t (-C$0.05/t); SE SASK at C$318.77/t (-C$0.55/t).
• EDW (EU durum) Mar contract was unchanged to €314.5/t;

• Chicago corn Mar contract was up 3/bu to 445c/bu;

• MATIF corn Mar was up €1.25/t to €208/t;

• Chicago soybeans Jan was down 6.2c/bu to 982c/bu;
• Winnipeg canola Jan contract was down C$11.4/t to C$601.1/t;

• MATIF rapeseed Feb was down €5.25/t to €541.75/t;

• Brent crude Feb was down US$0.58/barrel to $73.91;

• WTI crude Jan was down US$0.58/barrel to $70.71;

• BADI (Baltic Dry Index) was up 20 points to 1.071;

• Dow Jones was down 110,58 points to 43.717,48;
• S&P 500 was up 22.99 points to 6.074,08;
• NASDAQ Composite was up 247,17 points to 20.173,89;
• US dollar index (Mar '25) was down 0.128 points to 106.556;

• AUD/USD firmer at US$0.6371;
• USD/CAD firmer at $1.4244;
• EUR/USD firmer at $1.0510;
• USD/RUB weaker at ?103.5994.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

Source: Me, AAFC, ABARES, Abiove, AHDB, Amis, Argus Media, Baltic Exchange, Buenos Aires Grain Exchange, CFTC, CGC, China AgMin, Clear Grain Exchange, CME, Conab, Copernicus, CWG, ECB, ECMWF, EIA, Euronext, European Commission, Eurostat, FAO, FCI, FED, GASC, GIWA, ICE, IEA, IGC, IKAR, JRC MARS Bulletin, LSEG, MPOB, National Bureau of Statistics of China, ODC, OIAC, RBA, Reuters, Rosario Grain Exchange, Russia AgMin, Russian Grain Union, S&P Global, SovEcon, StatCan, USDA, UA AgMin, and Others ...

Note:

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