February 14, 2024 - Newswires

Corn managed modest gains, while soybeans and wheat slumped back into the red ...

Good morning, Farmer Family ...

US farm markets were mixed but mostly lower on Tuesday.

Corn prices picked up 0.06%.

Soybeans faded 0.57% lower.

The rest of the soy complex was mixed as soymeal slumped 1.18%, while soyoil rose 0.85%.

Wheat prices were mixed but mostly lower, as Chicago SRW closed unchanged, while Kansas City HRW lost 0.71%, and Minneapolis spring picked sank 1.58%.

• Corn prices firmed slightly, but still hovered near three-year lows.
• Ample global supplies, improving South American crop prospects, and intense export competition weighed over the market.
• Soybeans turned lower, following soymeal, as improving weather in South America alleviated some soy crush market concerns.
• Wheat prices in Chicago ended the session unchanged to lower, while other markets slumped.
• The wheat market remained pressured by falling prices in top exporter Russia and large volumes shipped by Ukraine.
• The lack of significant new activity on the international scenario continued to weigh on prices, exacerbating the competition between Black Sea and European wheat to sell their excess stocks before the end of the season.
• Grain and soybean also faced pressure from the strength of the U.S. dollar, with the dollar index hitting three-month peaks, after data showed U.S. inflation slowed less than expected in January.
• A lull in demand, partly reflecting Lunar New Year holidays in Asia, has contributed to the subdued mood in grain.
• The U.S. soybean crush slowed in January from the prior month's record, analysts said ahead of a National Oilseed Processors Association (NOPA) report due Thursday.
• The average trade guess is for the January total to be around 189.93 million bushel.
• Bean oil stocks are expected to hit 1.409 billion lbs for 1/31.
• Meantime, grain participants are shifting their focus towards U.S. planting forecasts expected later this week at a U.S. Department of Agriculture conference.
• Ahead of USDA’s annual Ag Outlook Forum, the trade is looking for the US corn acreage at 91.6 million acres.
• For soybean, the trade is looking for soybean planted acres to come in at 86.7 million acres.
• However, the drop in crop prices and rising production costs are set to slash US net farm income this year.
• In this context, corn basis bids were mostly steady across the central U.S. on Tuesday but did track 3 cents higher at an Indiana ethanol plant.
• Soybean basis bids moved 2 cents higher at an Illinois river terminal while holding steady elsewhere across the central U.S..
• Commodity funds, which hold large net short positions in US grain futures, were net buyers of Chicago corn but net sellers of soybeans and wheat.

This morning, soybean and corn eased, to three-year lows while wheat fell sharply as a strengthening dollar fuelled export concerns for U.S. crops that face stiff competition from ample global supplies.

• Notably, the most-active soybean contract on the Chicago Board of Trade was down 0.6%, by 1102 GMT.
• CBOT corn was down 0.6%.
• CBOT wheat was 2.1% lower.
• Soybean fell to a three-year low, corn also dipped to a three-year low, while wheat dropped to its lowest level in a month and slipping back towards last September’s three-year low.

South America

Brazil

Brazil’s Conab reported that as at 10 Feb, 2023-24 soybean harvest was 21pc complete, with beneficial climatic conditions favouring fieldwork in Mato Grosso, where an improvement in yields was noted.

• Lack of precipitation adversely affected productivity in parts of Rio Grande do Sul, while weather conditions in Parana were conducive for harvest.
• First (full-season) maize planting was 97pc complete, with harvest estimated at 19pc complete.
• While hot and dry weather aided fieldwork, it was termed unfavourable for later-sown fields.
• Crop development in Minas Gerais was below normal owing to adverse weather, with fields being abandoned in the north and the northwest of the state.
• Safrinha (second) crop plantings seen at 32pc complete, with biggest weekly advances observed in Mato Grosso on favourable weather, also aiding early crop development.
• However, lack of rain and high temperatures adversely affected crop development in Parana and Mato Grosso do Sul.
• In this context, AgRural estimated that by Feb 8, Brazil’s 2023-24 soybean harvesting was 23pc complete.
• The 2023-24 second (safrinha) maize crop production forecast was revised up 5Mt, to 91.2Mt, reflecting larger than previously expected plantings.
• Accelerated harvest of soybeans, most notably in Mato Grosso, widened the ideal planting window for second maize.

Europe

European grain prices were little changed, while rapeseed was supported by the rebound of canola in Winnipeg and palm oil in Kuala Lumpur.

• A weaker euro underpinned European prices.
• Highlighting export competition, prices in Russia fell again last week, while the Russian government proposed to expand a grain export quota for 2024.
• A lot of cheap Ukrainian feed wheat and corn is going to Spain and other south EU importers, cutting internal EU demand.
• On the export side, soft wheat exports from the European Union since the start of the 2023/24 season in July had reached 18.65 million metric tons by Feb. 2, data published by the European Commission showed.
• That was 8% below last year’s pace so far, while imports with 5.77 MMT rose by 3%.
• EU 2023/24 barley exports were put at 3.48 million tons by Feb. 2, against 3.61 million tons by Feb. 12 last season.
• On imports side, EU maize imports this season had reached 10.59 million tons by Feb. 2, compared with 18.44 million tons by Feb. 12 in 2022/23.
• European Union soybean imports during the 2023/24 marketing year have reached 6.95 MMT.
• EU soymeal imports reached 8.73 million metric tons over the same period.

• The Commission said data since Feb. 2 was missing because of continuing technical issues that led it to postpone publication last week.
• Data for Ireland was still missing for the whole of the current season while figures for Bulgaria have been missing since mid-January, the Commission said in its EU grain export and import update.

• Thus, the prospect of large stocks being left in Western Europe this season was tempering concern about rain-hit planting for the next harvest.
• France's agriculture ministry reduced its estimates of winter grain sowing, with the soft wheat area seen at its second-lowest in 30 years, after heavy rain disrupted field work.
• On this wake, Farm office FranceAgriMer on Wednesday again raised its forecast for French soft wheat stocks at the end of the 2023/24 season, as it cut expected exports to other European Union countries.
• Soft wheat stocks at the end of the season on June 30 are now seen at 3.50 million metric tons, up from 3.44 million forecast last month.
• That would be a 37% increase on last season's stocks and a 31% rise compared with FranceAgriMer's initial forecast for 2023/24 stocks made last July.
• Notably, the office reduced its estimate for French soft wheat exports within the EU this season to 6.32 million tons from 6.55 million projected in January, now down 1% from last year.
• Together with a slight cut to expected domestic demand, the lower forecast for intra-EU exports outweighed an upward revision to FranceAgriMer's forecast for French soft wheat exports outside the EU in 2023/24, now pegged at 10.25 million metric tons compared with 10.1 million tons last month.
• Projected maize (corn) stocks at the end of 2023/24 were also increased, to 2.37 million tons from 2.18 million in January, as estimated harvest supply was revised up while domestic demand was trimmed.
• The new maize stocks forecast was 43% above the 2023/23 level.
• Forecast barley stocks in 2023/24 were left at 2.11 million tons, more than double last season's 1.02 million.

Ukraine

Ukraine is on track to export all grain from its 2023 harvest, Britain’s foreign office said.

• Ukraine has exported almost 2.4 million metric tons of grain so far this month, slightly lower than the 2.7 million tons exported over the same period in 2023, agriculture ministry data showed.
• Exports have included 10.1 million tons of wheat, 14.4 million tons of corn and 1.5 million tons of barley.
• Meantime, winter weather conditions have been mostly favourable for Ukrainian winter crops, state meteorologists said.
• Farmers sowed about 4.2 million hectares of winter wheat for the 2024 harvest.
• "As of Feb. 10, the weather conditions for winter crops in Ukraine have been generally satisfactory since the beginning of winter," forecasters said.
• Forecaster also said that fields in most of the country's regions had sufficient moisture in the soil and only some areas in the southern Kherson and Odesa regions had levels that were "less than the average long-term values.

• In the southern regions is beginning the spring sowing, meantime.
• Agriculture minister Mykola Solsky said last week the ministry expected the 2024 spring sowing area would be the same as last year, though it could see a slight decrease in the worst case scenario.
• On this wake, the overall spring sowing area could fall by about 500,000 hectares this year, or by 3.7%.
• Notably, farmers are expected to reduce the area sown with corn by 9% year-on-year in 2024, a survey compiled by the country’s agriculture ministry showed on Tuesday.
• The fall in corn area, however, could be partly offset by an increase in the area sown with sugar beet, rapeseed and soybeans.
• Producers are still considering the area to sow with sunflowers.

Southeast Asia

Malaysia

Malaysian palm oil prices closed higher, as industry data showed that stockpiles of the tropical oil slumped to their lowest levels in six months.

• The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed up 0.36%.
• However, palm oil imports by India in January dropped more than 12% from a month ago to a three-month low.
• The rebound in palm oil prices can also to be capped by abundant supplies of rival soyoil and sunflower oil, which are “soft” oils available at discounts to tropical palm oil for the first time in more than a year.

Australia

Western Australia’s latest winter-crop harvest has weighed in at 14.53 million tonnes (Mt), according to the Grain Industry Association of WA’s final estimates for the season released this week in its 2023-24 harvest summary.

• The estimate is up 2 per cent from 14.28Mt seen in GIWA’s December Crop Report.
• GIWA puts WA’s five-year grain production average to 2023 at 18Mt.
• Meantime, Australia exported 1,298,659 tonnes of barley and 10,944t of sorghum in December, according to the latest data from the Australian Bureau of Statistics.
• Feed barley shipped in December totalled 843,260t.
• China was the biggest market by far, taking 87pc of Australia’s December feed barley shipments.
• Malting barley shipments were at 455,399t, with China once again the main destination acccounting a 95pc of the total.
• December sorghum shipments totalled 10,944t, with also in this case, China the destination number 1.
• In this context, WA wheat values have been a touch weaker over the past week, which has meant an overall reduction in liquidity from the grower.
• Most bids for APW1 are sitting around A$400/t FIS Kwinana.
• Feed barley is in the $340-$345/t FIS price range for all major WA ports, while the best bids for canola (CAN) are $670-675/t FIS for Kwinana, Albany & Esperance.
• East coast wheat values were a touch firmer for delivered markets but lacked any real change up country.
• ASX was also off the boil, back down to $355.50/t for March.
• GM canola basis is firming as the spread to non-GM is trading at evens in Melbourne port zones.

International grain and oilseed tenders & trade

• Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Feb. 28 and arrive in Japan by March 21, via a simultaneous buy and sell (SBS) auction, which will be held on Feb. 21.
• Algerian state agency ONAB has issued international tenders to purchase up to 160,000 metric tons of animal feed corn and 35,000 tons of soymeal. The deadline for submissions of price offers in the tenders is Wednesday, Feb. 14. The corn is sought sourced from Argentina or Brazil only in up to four consignments of 40,000 tons. Shipment of two corn consignments is sought between March 1-15 and two between March 13-31. The soymeal can be sourced from any optional origins and is sought for shipment in one consignment between March 1-15.
• Jordan's state grains buyer purchased about 60,000 metric tons of hard milling wheat to be sourced from optional origins in an international tender on Tuesday. It was believed to have been bought from trading house Ameropa all at an estimated $253.00 a ton cost and freight (c&f) for shipment in the first half of May.
• Jordan's state grain buyer has purchased about 60,000 metric tons of animal feed barley to be sourced from optional origins in an international tender which closed on Wednesday. It was bought at an estimated $219.00 a ton c&f for shipment in the first half of June. The seller was believed to be trading house Dreyfus. Jordan is expected to issue a tender for 120,000 tons of barley in coming days closing on Feb. 21 seeking April and May shipment.
• Meantime, Jordan's state grain buyer also has issued an other international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins. The deadline for submission of price offers is Feb. 20.Shipment in the new tender, for hard wheat, was sought in a series of possible combinations of 50,000 to 60,000 ton consignments. Possible shipment combinations were May 1-15, May 16-31, June 1-15 and June 16-30.

Outside markets ...

Energy markets

Oil prices settled higher, as geopolitical tensions continued in the Middle East and eastern Europe, but gains were curtailed as investors reined in expectations for the Fed interest rate cuts.

• The U.S. rejected Russian President Vladimir Putin's suggestion of a ceasefire in Ukraine, according to sources.
• Fears of further escalation of the war in the Middle East also stoked worries about the oil supply outlook.
• Talks involving the U.S., Egypt, Israel and Qatar on a Gaza truce ended without a breakthrough.
• Meantime, a U.S. government report showed consumer inflation stayed elevated last month.
• This could dampen economic growth and oil demand, and it also boosted the dollar to three-month peaks, which reduces demand for oil among buyers paying in other currencies.
• Per latest data from the American Petroleum Institute, U.S. crude oil inventories rose 8.52 million barrels in the week ended Feb. 9.
• However, gasoline inventories fell 7.23 million barrels, and distillate stocks fell by 4.02 million barrels.
• In this context, Brent futures settled 0.94% higher, while U.S. West Texas Intermediate crude settled 1.24% higher.

This morning, oil prices were little changed.

• Brent crude futures rose 0.07% by 0953 GMT, while U.S. West Texas Intermediate crude futures were flat.
• The OPEC said in its monthly report on Tuesday that global oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. Both forecasts were unchanged from last month.
• The IEA will release its own monthly oil report on Thursday.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London rose for a third straight session, to hit a one-month peak, as rates climbed across larger vessel segments.

• The overall index was up 0.8%, hitting its highest level since Jan. 10.
• The capesize index also scaled a one-month high, adding 0.9%.
• The panamax index gained for a sixth consecutive session, rising 1.6%.
• The supramax index lost less than 0.1%.

Equity markets

US stock indexes sold off sharply, with the S&P 500 falling to 1-week lows and the Dow Jones Industrials falling to a 2-week low.

• Stocks retreated on a stronger-than-expected U.S. Jan CPI report that pushed bond yields higher and dampened expectations for Fed rate cuts.
• U.S. Jan CPI eased to +3.1% y/y, stronger than expectations of +2.9% y/y.
• The Jan core CPI (ex-food and energy) of +3.9% y/y was unchanged from December’s 2-1/2 year low and it also was stronger than expectations.
• The 10-year US T-note jumped to a 2-1/4 month high of 4.316% and finished up +13.1 bp at 4.310%.
• In Europe, the German Feb ZEW survey expectations of economic growth rose +4.7 to a 1-year high of 19.9.
• Japan's Jan PPI rose +0.2% y/y.
• Japan Jan machine tool orders fell -14.1% y/y, the thirteenth consecutive month orders have declined.

This morning, global shares were mixed, after disappointingly high U.S. inflation data.

• In Europe, France's CAC 40 gained nearly 0.2%, Germany's DAX added 0.1%, Britain's FTSE 100 added 0.5%.
• In Asia, Japan's benchmark Nikkei 225 shed 0.7%, Australia's S&P/ASX 200 dipped 0.7%, South Korea's Kospi fell 1.1%, India's Sensex gained 0.2% and the SET in Bangkok lost 0.6%.
• Hong Kong’s Hang Seng index resumed trading after the Lunar New Year holiday, surging 0.8%.
• Markets in mainland China remain closed all week.
• Market watchers were paying close attention to the outcome of the presidential election in Indonesia, one of Southeast Asia's biggest economies and a supplier of strategically important resources like nickel.

Currency trading

The dollar index rose, posting a 3-month high.

• The dollar rallied after bond yields spiked higher on the stronger-than-expected U.S. Jan CPI report.
• The hawkish CPI report also pushed back expectations of Fed rate cuts.
• The slump in stocks also boosted liquidity demand for the dollar.
• The EUR/USD fell, posting a 3-month low, though the euro initially moved higher as the German Feb ZEW survey expectations of economic growth rose more than expected to a 1-year high.
• The USD/JPY rose, with the yen tumbling to a 2-3/4 month low against the dollar.
• The yen saw a reduced demand as a safe haven after the Nikkei Stock Index rallied sharply to a 34-year high.

This morning, the U.S. dollar was hovering above 150 Japanese yen, falling to 150.59 yen from 150.86 yen. In other currency trading, the euro cost $1.0700, little changed from $1.0712.

Settlement prices for key commodity, index & currencies

• Chicago wheat Mar contract was unchanged to 597.4c/bu;
• Kansas wheat Mar contract was down 4.2c/bu to 594.4c/bu;
• Minneapolis wheat Mar contract was down 10.6c/bu to 671.6c/bu;
• MATIF wheat Mar contract, was up €0.5/t to €209/t;
• ASX wheat Mar contract was down A$4.5/t to A$363/t;
• Black Sea wheat has not quoted since August 11, 2023;
• US DWI Cash (durum wheat index), was down 2.37c/bu to 834.82c/bu;
• 1CWAD (Canadian durum) avg spot prices was down 1.62C$/t to C$407.76/t;
• EDW (EU durum) Mar contract, was unchanged to €382.5/t;
• Chicago corn Mar was up 0.2c/bu to 430.6c/bu;
• MATIF corn Mar was down €0.25/t to €177.5/t;
• Chicago soybeans Mar down 6.6c/bu to 1186.2c/bu;
• Winnipeg canola Mar was up C$4.5/t to C$595.5/t;
• MATIF rapeseed May contract, was up €3.25/t to €425/t;
• Brent crude Apr was up US$0.77 per barrel to $82.77;
• WTI crude Mar was up US$0.95 per barrel to $77.87;
• BADI (Baltic Dry Index) was up 13 point to 1.585;
• Dow Jones was down 524.63 points to 38.272,75;
• S&P 500 was down 68.67 points to 4.953,17;
• NASDAQ Composite down 286.95 points to 15.655,60;
• US dollar index (Mar '24) was up 0.803 points to 104.850;
• AUD/USD weaker at US$0.6453;
• USD/CAD firmer at $1.3564;
• EUR/USD weaker at $1.0709;
• USD/RUB firmer at ?91.4920.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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