GRAIN & PRICES WEEKLY REPORT

Good afternoon Farmer Family ...

A broad sell-off in commodity and equity markets, tied to the high inflation, rising interest rates and an economic downturn that would dent demand, dragged down a broad set of other commodities, on Friday.

Wall Street equity markets plunged, U.S. crude oil futures dropped nearly 6% and the dollar touched a two-decade high, making U.S. grains less competitive globally.

Consequentily, U.S. farm markets haven't been immune to the risk-off.

Wheat prices were hit the hardest, but corn and soybeans also suffered a moderate setback.

Particularly, corn prices had dropped by 1.67%.

That was just enough to flip in red wk/wk, though the net loss was just 0.07%.

Soybeans sank 2.14% during the end week session, which flipped the week’s move to net loss of 1.57%.?

Soymeal prices went home with 1.35% losses, erasing most of the week’s early gains.

They had a net 2.4% gain Friday to Friday, however.?

Soybean oil prices closed the day with triple digit losses of as were down 3.5%.?

That sent soy oil prices into the weekend to a weekly drop of 2.42%.?

The wheat complex, after surged on the Black Sea conflict’s escalations, pulled back, posting more then 3% drops into the weekend.?

Particularly, Chicago SRW wheat prices closed the day with 3.32% losses.?

That limited the Dec contract’s weekly gain to 2.42%.?

Kansas City wheat prices were down by 2.96% on Friday.?

However, they were 1.64% higher on the week, despite Friday weakness.

Minneapolis spring wheat prices ended the day 2.91% in the red, but they were able to gain 1.12% since the prior Friday, nevertheless.?

Going inside the numbers, corn prices closed down $0.005 at $6.766/bu for the week.

Soybean prices finished the week $0.227 weaker at 14.26/bu.

Soymeal gained $10.3/smt, closing at $439.90 smt.

Soy oil, has shedded $1.66, to close at $67.00.

CBOT soft red winter (SRW) prices rose $0.208 to close at $8.81/bu.

KCBT hard red winter (HRW) prices gained $0.153, ending at $9.51/bu.

MGE hard red spring (HRS) prices lifted $0.105 to close at $9.49/bu.

Meantime, corn basis bids were mostly steady across the central U.S. but did tumble 15 to 20 cents lower at two Indiana ethanol plants, on Friday.

Soybean basis bids were steady to weak after crumbling 15 to 35 cents lower at three Midwestern processors and easing 2 cents lower at an Illinois river terminal.

As for wheat, basis was mixed in the Gulf and firmer in the Pacific Northwest (PNW), this week.?

It should to note, despite the surge in futures prices, basis remained firm for all wheat classes.?

Competition among other U.S. grain exports like corn and especially soybeans is typical in October, leading to higher elevation costs.?

However, grain traders remarked that export business has been slow lately.?

And news of Russia's bumper crop, had pushed markets lower early in the week.

On Friday, indeed, weekly CFTC data showed managed money funds were 247,909 contracts net long in corn as of the 9/20 settle.?

That was a 7,266 contract bigger net long position, with net new buying.?

Commercial shorts were net new sellers during the week, extending their net short by 6.7k contracts to 461,638.?

That was their strongest net short since June.?

Farmer selling picked up, with outright commercial short hedges increasing 10,686 contracts in the reporting week.??

As for soybeans, the report showed managed money as 104,691 contracts net long in soybeans for 9/20.?

That was a 7,436 contract weaker net long through the week, mainly as long liquidation.?

Those same spec longs and then some were bought by the commercial hedgers, which extended long coverage by 12.3k contracts.?

The commercial net short then shrank 11k contracts to 129,447 – the lowest since October ’21.?

The report showed the funds were buying soymeal through the week of 9/20, extending their net long 14.5k contracts to 102,168 contracts.?

In bean oil the spec funds were 58,310 contracts net long up by 3,040 contracts wk/wk.?

As for wheat the report had CBOT wheat specs reducing their net short through the week that ended 9/20.?

The short covering left the group 4,683 contracts less net short at 15,703 contracts.?

In KC wheat, the funds were 2,067 contracts more net long to 19,059 contracts.?

CFTC data had spring wheat spec traders at 2,369 contracts net long after net new buying flipped the groups net position.?

Then, on Wedsneday, grain prices reversed their course and surged, after Moscow's moves to mobilise more troops and back referendums on joining Russia in occupied regions of Ukraine, fuelled concern about further disruption to vital Black Sea grain trade.

Dry weather in Argentina and the U.S. also supported prices.?

However, into the weekend, looming concern about a possible recession in the U.S. strengthened the U.S. dollar, making exports still more expensive, spurring the sell-off.

Thursday’s Export Sales report, indeed, was nothing to brag about.

Corn export sales totaled just 182,300 MT.?

Corn sales for the 22/23 marketing year have gotten off to a slow start, with shipped and unshipped sales just 22% of the current USDA forecast vs. the 30% average pace for the second week in the new MY.?

Outstanding sales are just half of what they were for same period last year.

As for soybeans, the report showed bean bookings totaling 446,400 MT in the week that ended on 9/15.?

Forward sales treated beans good, with 45% of the USDA forecast already met, 5% faster than the average pace.??

As for wheat, net commercial sales for delivery in 2022/23 were 183,500 metric tons (MT), below trade expectations of 200,000 MT to 500,000 MT.?

Year-to-date 2022/23 commercial sales total 10.4 million metric tons (MMT).?

USDA expects 2022/23 U.S. wheat exports to total 22.45 MMT.?

That means the total wheat committed for export to 47% of USDA’s current forecast, and 5% behind the normal pace.?

Also, EIA data on Wednesday showed ethanol production falling 62,000 barrels per day to 901,000 bdp, the smallest implied corn use for that purpose since February 2021.?

Stocks, however, dropped 342,000 barrels to 22.501 million barrels.?

Outlooks for clear Midwest weather added to bearish sentiment, even though the U.S. Department of Agriculture has projected smaller U.S. corn and soy crops compared to a year ago.?

The harvest is just beginning in the heart of the Corn Belt, with 7% of the U.S. corn crop and 3% of the U.S. soybean crop cut as of Sept. 18.

Monday’s Crop Progress report indicated 40% of the nation’s corn crop was mature, still 5% points behind the average pace.?

As for crop conditions, NASS showed a 52% good/ex rating, down 1% on the week.?

As for soybeans, NASS update had 42% of the soybean crop dropping leaves as of 9/18, compared to 47% for the average pace.?

NASS also reported 21% of the winter wheat crop was seeded, 4% faster than the normal pace, with 2% emerged.?

Below-normal rainfall is expected over the next 15 days.

The latest 72-hour cumulative precipitation map from NOAA shows very little rainfall will be likely west of the Mississippi River between today and Tuesday, although large portions of the eastern Corn Belt will see at least some measurable moisture during this time.?

NOAA’s 8-to-14-day outlook predicts a return to seasonally dry, warm weather for much of the central U.S. between September 30 and October 6.

That, surely will favor dry-down and early harvesting of both corn and soybeans.

In this context, as of September 22, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $443/mt (up $18/mt from last week).

US wheat No 2 Soft Red Winter (SRW) was valued at $399/mt (up $22/mt from last week).

Northern Durum offers from the Great Lakes for October 2022 delivery was valued at $11.15/bu, unchanged week on week ($410.00/MT).

As for corn, US corn 3YC (Gulf) was at $329/mt (up $5/mt from last week).

As for soybean, US soybean 2Y (Gulf) quoted at $607/mt (unchanged from last week).

The weekly Ag Energy Roundup report from USDA had the week’s cash ethanol markets range $2.30 to $2.54/gal regionally.?

Prices were generally 14c/gal weaker ,wk/wk.?

Corn oil prices were $1-2 dollars weaker to 71-76 cents/b.?

B100 biodiesel prices were $6.76/gal in MN – UNCH wk/wk.?

In energy markets, oil prices plunged to an eight-month low on Friday.

Brent futures fell $4.31, or 4.8%, to settle at $86.15 a barrel, down about 6% for the week.?

U.S. West Texas Intermediate (WTI) crude fell $4.75, or 5.7%, to settle at $78.74, down about 7% for the week.

It was the fourth straight week of declines for both benchmarks, the first time this has happened since December.?

U.S. gasoline and diesel futures were also down more than 5%.

The U.S. Federal Reserve raised interest rates by a hefty 75 basis points on Wednesday.?

Central banks around the world followed suit with their own hikes, raising the risk of global economic slowdowns.

The U.S. dollar exploded and the dollar index reached its highest in over two decades.

A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.

In Europe, the euro zone's downturn in business activity deepened in September.

That is suggesting a recession looms as consumers rein in spending and as governments urge energy conservation.

In ocean freight markets,?the Baltic Exchange’s main sea freight index, rose on Friday, registering its fourth straight weekly gain, supported by higher demand for capesize vessels.

The overall index, indeed, was up 96 points, or about 5.6%, at 1,816, its highest in over a month and a half.?

It gained 16.8% on the week.

Particularly, the capesize index was up 277 points, or about 14.4%, to 2,206.?

It posted a second consecutive weekly gain of about 45.2%.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were up $2,293 at $18,293.

The panamax index was down for the third consecutive session by 3 points, or about 0.2%, at 1,995.?

However, it posted a 0.3% weekly gain, its third in a row.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell $24 to $17,959.

The supramax index rose for the eighth consecutive session, adding 15 points, to 1652, and ending its best week in a month 6.5% higher.

In equity markets, U.S. and European stocks tumbled on Friday.

Soaring global interest rates sparked heavy long liquidation pressure in the stock market.

The S&P 500 fell 64.76 points or 1.72% to 3,693.23, its fourth straight drop.?

The Dow, which at one point was down more than 800 points, lost 486.27 points, or 1.62%, to close at 29,590.41.?

The Nasdaq fell 198.88 points, or 1.85%, to 10,867.93.

Smaller company stocks did even worse.?

The Russell 2000 fell 42.72 points, or 2.5%, to close at 1,679.59.

MSCI's world stocks index shed 2.07% to almost two-year lows.?

The pan-European STOXX 600 index closed down 2.34%, its biggest weekly loss in three months.

The Fed's signal that it expects high U.S. rates to persist through 2023 sparked the rout in equity and bond markets.

Yields on the benchmark 10-year U.S. Treasury note have soared.?

The 10-year T-note yield jumped to a 12-year high of 3.825%.

Yields on 10-year Treasury Inflation-Protected Securities, which account for expected inflation and are known as real yields, reached 1.426%, the highest since February 2011.

The yield on the 2-year Treasury, which tends to follow expectations for Federal Reserve action, rose to 4.20% from 4.12% late Thursday.?

It is trading at its highest level since 2007.?

The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.69% from 3.71%.

The inversion in the yield curve between two- and 10-year notes reached minus 58 basis points on Thursday, the most inverted in at least two decades, and was last at minus 51.6 basis points, confirming fears about a looming recession.

UK bond prices went into a tailspin, with yields on the five-year gilt leaping 51.4 basis points to 4.052%, the largest one-day rise since at least late 1991.?

UK 10-year gilt yield jumped to an 11-year high of 3.848%.

Euro zone bond yields also rose sharply, with the Italian 10-year hitting 4.294% , its highest since late 2013, ahead of Italian elections on Sunday.

The 10-year German bund yield rose to a 10-year high of 2.112%.

Friday’s U.S. economic news weighened more on the sentiment, as the Sep S&P Global U.S. Manufacturing PMI unexpectedly rose +0.3 to 51.8, stronger than expectations of a decline to 51.0.

A report from Bank of America Friday said EPFR information shows that investors moved $30.3 billion into cash, while global equity funds saw outflows of $7.8 billion, and global bond funds lost $6.9 billion in the week through Sep 21.

Goldman Sachs cut its year-end target for the S&P 500 to 3,600 from 4,300, saying a dramatic shift in the outlook for interest rates will weigh on valuations for U.S. equities.?

In currency trading, the dollar index rose 1.6% and the dollar scaled a 22-year high.

The euro plummeted to a 20-year low, falling for a fourth straight day, sliding 1.49% to $0.9689 after data showed the downturn in the German economy worsened in September.?

Sterling fell 3.49% to $1.0864 in its biggest single-day decline since March 2020 and falling to a 37-year low.

The Japanese yen weakened 0.68% to 143.34 per dollar, but failed to notch its first weekly gain in more than a month.?

Japan intervened in the foreign exchange market on Thursday to buy yen for the first time since 1998 in attempt to shore up the currency after the Bank of Japan (BOJ) stuck with ultra-low interest rates.?

Japan’s currency has depreciated nearly 20pc this year, sinking to 24-year lows, largely as aggressive US interest rate hikes push the dollar to 20-year highs.?

In Canada, as of September 19, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):?

- for the N1 class CWRS 13.5% - $493.79 per tonne, up C$6.92/t from prior week;?

- for the N2 class CWRS 13.0% - $486.47/t, up C$7.71 wow;

- for the N3 CWRS - $507.94/t, up C$0.05 from prior week.

As of September 19, 2022, for the N1 CWAD 13% (durum wheat first class) average street price were at C$404.55, rose by C$0.37 week on week.

The export basis West Coast & Central SK, also moved up, from C$ 127.51 to 139.50 a tonne.

Thus, delivered FOB price Great Lakes was posted at C$544.05.

That represent a C$12.36/t gain from prior week.

Per latest data from European Commission, as of September 21, 2022, Durum wheat - FOB CA St Lawrence (CWAD) was offerd at C$557.23/t, up C$13.41/t week on week.

As of September 23, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES were at C$420.02 per tonne, up C$20.21 from prior week.

(1USD=Cnd$1.3591, up from 1.3264 a week earlier).

As for Saskatchewan harvest, as seen at September 19, many producers experienced cool, damp weather this past week which halted or slowed their harvest operations until conditions improved.?

Other producers that were able to continue either finished their harvest or are very close to doing so.?

Harvest progress for the province is at 73 per cent, up from 64 per cent last week and ahead of the five-year (2017-2021) average of 68 per cent.?

An additional 18 per cent of the crop is ready to be swathed or straight-cut.

Harvest is most advanced in the southwest region, where 96 per cent of the crop is now combined.?

The west-central region has 89 per cent combined and the southeast 65 per cent.?

The northwest region has 63 per cent combined, the northeast 58 per cent and the east-central 52 per cent.

Ninety-seven per cent of the lentils and field peas, 94 per cent of the durum, 78 per cent of the barley, 77 per cent of the spring wheat, 52 per cent of the canola and 35 per cent of the flax has now been combined.?

An additional 36 per cent of the canola is swathed or ready to straight-cut.

Precipitation was generally welcomed after several weeks of dry weather.?

Concerns about field and equipment fires have eased and there is hope that the rain will be enough in some areas to allow pastures a little regrowth.?

In Manitoba, harvest progress sits at 40% completed across the province, approximately 3 weeks behind the 5-year average of 71% complete by week 38.

Steady rainfall across the province late last week stalled harvest progress.?

Farmers are anxiously awaiting drier weather to return to straight-cutting cereal and canola crops, and for breezy days to dry down damp swaths.

Canola harvest has been slow to ramp up – rain delays, high humidity, and soft fields have prevented the jump in harvested acres, but good progress has been made in the Central, Eastern, and Northwest

regions.

Winter cereal harvest is complete.

Seeding fall rye and winter wheat has started, primarily on canola stubble.?

Seedbed conditions are good, and recent rains will rapidly germinate planted crops.

Spring wheat harvest is ongoing in all regions, and wrapping up in the central region as producers move into canola crops.?

Good harvesting weather has aided producers, and grain quality remains high.

CWRS wheat is mostly grading № 1, protein has ranged between 13.5 to 14.8%.

Spring cereal harvest progressed rapidly until Friday, and slowed or stopped over the weekend with frequent showers and high humidity.?

Spring wheat is approximately 65% harvested.

Wheat yield averages are reported between 60 to 70 bu/acre across the province.

In Alberta, this week’s crop report confirms ongoing harvest progress with above average yield and quality expectations.?

As at September 20, eighty-seven per cent of all crops were swathed or combined with an expected 10-year yield index of 107 and with grading expectations of the provincial wheat, barley, canola, and pea crops ahead of 10-year averages.

Combining across the province on all crops is now 77 per cent complete and well ahead of the 10-year average of 53 per cent.?

Two weeks ago on September 6, combining of all crops was 37 per cent complete.?

Alberta farmers have been able to harvest 40 per cent of all crops in the past two weeks.?

Specifically this past week, the North East and North West made significant harvest progress with both increasing combine completion on major crops by 21 per cent through the week.

However, the Peace region received meaningful rainfall which slowed last week’s progress.?

Overall, for this time in the season, the South and Peace are ahead of harvest compared to this time last year but Central, North East and North West regions are behind.?

Across the province, combine completion on all crops is relatively unchanged year-over-year (79 per cent at this time last year).?

Quality expectations are also being reported favorably on major crops relative to long-term normal with exception of durum.?

Hard Red Spring Wheat is expected at 68 per cent 1 CW (54 per cent on five-year average) and is reported in particularly high quality in the Peace.?

Barley, canola, and dry pea quality expectations are modestly ahead of their longterm averages and oats marginally behind long-term normal quality.?

Durum is the notable exception with a quality downgrade relative to normal, as 12 per cent more than normal of the total provincial crop is expected at 2 CW grade.?

Meantime, producers' deliveries of common wheat in week 7 of the shipping season, were at 767,40k mt.

That was weaker from 1.051,4k of a week erlier.

Deliveries of durum wheat also increased to 115.4k mt down from 139.6k mt a week earlier.

Canada exported 278.5k mt of common wheat in week 7 of the shipping season, sligtly down from 279.7k mt a week earlier.

Durum wheat exports were at 77.2k mt vs 54.5k mt a week earlier.?

Meantime, Commercial Stocks of common wheat stood at 1.850,2k mt, up from 1.699,9k mt a week earlier.

As for durum, commercial stocks were at 388,4k mt, up from 364,7k mt a prior week.?

From South America, Brazilian wheat production should total 10.935 million tonnes in 2022 as four states are likely to increase output in what will be a record season for local farmers, according to agribusiness consultancy Safras & Mercado on Wednesday.

The new estimate represents an increase from the 10.5 million tonnes previously expected.

If projections are confirmed, Brazil's wheat production this year will be 41.2% higher than the 7.745 million tonnes in 2021, which was already a record, Safras said.

Thanks to the development of new wheat varieties, Brazilian farmers are able to cultivate wheat plants adapted to tropical conditions.

South American soybean production will hit a record high in the season that is now being planted, agribusiness consultancy Datagro said on Friday, citing an expected area expansion to an all-time high.

South American farmers will reap an estimated 219.34 million tonnes in the 2022/2023 season from a planted area of 66.09 million hectares (163.3 million acres), according to Datagro's first estimate for the new crop.

If confirmed, South American soybean production would grow by 21% from the 181.95 million tonnes estimated for the 2021/2022 harvest.

Brazil, which began planting its 2022/2023 crop in recent days, will contribute about 70% of South America's entire output, or just below 152 million tonnes, Datagro said.

The 2022/2023 area for South American soybean plantings would be a 3% rise from the previous season, and also the sixth consecutive increase in acreage, according to Datagro.

However, highlighted risks associated with the La Ni?a weather phenomenon.

In contrast, Argentina's Rosario grains exchange cut its production forecasts for the country's corn and wheat crops on Wednesday as a prolonged drought impacts the major grains-producing country.

In the exchange's monthly report, indeed, it estimated corn production from the 2022/2023 harvest to reach 56 million tonnes, below the previous estimate of 58 million tonnes.

In some areas such as Santa Fe's province, wheat per square meter is far less than estimated at the start of the season in May, it added.?

With that, the estimated area for corn fell to 8 million hectares, from 8.2 million previously estimated.

The exchange also forecast the 2022/2023 wheat harvest at 16.5 million tonnes, down from 17.7 million tonnes before.

World Grain reported that wheat rated "regular-to-bad" went from 18% to 34% last month, a market analyst today updated the rating to 42% poor to very poor.

Meanwhile, the Rosario grains exchange increased its forecast for 2022/2023 soybean production at 48 million tonnes, up from the 47 million tonnes previously forecast.?

Some fields planned to be sown with corn will be planted with soybeans instead, causing an increase in the exchange's estimate for soybeans, with planting set to begin in October.

"Soybeans are adjusted again upwards. This time with 200,000 more hectares that will stop being planted with corn to raise the number of intended soybean plantings to 17.0 million hectares," said the exchange's report.

In this context, as of September 22, 2022 - Argentina Wheat Grade 2 export price, (Up River) was at $405, up $5/t from prior week.

Argentina corn feed was down $4/t for the week, closing at $295.

Brazilian corn feed (Paranagua) was valued at $291, was up $1/t from prior week.

Argentina feed barley, was unchanged for the week to $320.

Argentina soybean was up $2 at $581.

Brazilian soybean was up $4, finishing the week at $611.

In Europe, Euronext ended the end week session without a clear trend despite a further fall in the eurodollar parity.?

Worrying economic indicators in Europe have in fact plunged the European currency.

In the Eurozone, inflation was a record 9.1% in August due to higher energy and food prices.

The European Union's (E.U.) statistics agency reported that bread prices in August 2022 were 18% higher than a year ago, the highest rise since December 2017.?

Eurostat said prices rose the most in Hungary, which reported a 66% increase in price, and Lithuania recorded a 33% increase.?

The combined cost of bread and cereals rose 16.6%, the highest rate since January 1997.?

Meantime, non-commercial market participants expanded their net long position in Euronext's milling wheat futures and options in the week to Sept. 16, data published by Euronext on Wednesday showed.

Particularly, non-commercial participants, which include investment funds and financial institutions, increased their net long position to 101,052 contracts from 92,221 a week earlier.

Commercial participants extended their net short position to 120,704 contracts from 109,109 a week earlier.

Commercials' short positions accounted for 63.9% of the total short position, while commercial long positions accounted for 43.2% of total long positions.

Non-commercial short positions represented 36.1% of total short positions, while non-commercial net long positions accounted for 56.8% of the total longs.

In Euronext's rapeseed futures and options, non-commercial market participants raised their net short position to 27,875 contracts from 26,309 a week earlier.

Commercial participants increased their net long position in rapeseed to 26,314 contracts from 25,528 a week earlier.

On Friday, FranceAgriMer said French farmers had harvested 26% of this year's grain maize crop by Sept. 19.

That is compared with 14% a week earlier and with a 1% harvest progress by the same week last year.

An estimated 43% of maize crops were in good or excellent condition last week, unchanged from the previous week.

That is the lowest in FranceAgriMer data going back to 2011.

Maize crops were running 22 days ahead of the growth pace of last year and 12 days ahead of the five-year average, FranceAgriMer said.

In this context, December wheat prices on Euronext closed the week at 346.25 euros a tonne, up €12.5/t for the week.?

November corn price, was up €10.5/t for the week, closing at 338.50 euros per ton.

Rapeseed Nov contract closed at €606.75/t, up €29.5/t for the week.

Nov-22 UK wheat feed contract, closed at ￡284.20/t, up ￡9.7/t week on week.

Meantime, as of September 22, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Oct delivery, were at $346/mt, up $5 from prior week.

German wheat, Deposilo Hamburg, was valued at $329.46/t, up $0.97 from prior week.

Baltic wheat, delivery first Vilnius, was quoted $310.08, up $8.63 from prior week.

Spanish durum wheat Sevilla (Depo Silo), n.q. this week, past week was valued at $500.75 per tonne.

French durum wheat - delivered La Pallice Spot - July 2022 basis, this week was valued at $436.05/mt, up $5.4 from prior week.

Italian durum wheat Bologna (Delivered to first customer), was valued $453.49/t, down $15.21 from prior week.

Corn, delivered Bordeaux Spot - July 2022 basis, was at $340.12 per tonne, down $1.39/t from past week.

Corn FOB Rhin Spot - July 2022 basis, was down $1.88 to $324.62/t.

Feed barley delivered Rouen was at 304.27$/t, up $5.82 per tonne.

Malting barley FOB Creil Spot - July 2022 basis was at $339.15 per tonne, down $6.37/t from prior week.

Rapessed FOB Moselle - 2022 harvest was at 587.21$/ton, up $4.34 compared to prior week.

Standard sunseed FOB Bordeaux - 2022 harvest was down 22.10$ from prior week at $658.92 per tonne

(Eur/USD = 0.9690 vs last week 1.0015).

From Russia, analyst Sovecon said on Thursday it had raised its forecast for Russia’s 2022 wheat crop to 100Mt (Mt) from 94.7Mt due to high yields of spring wheat.?

“Russian wheat crop is to exceed the previous record of 86.0Mt [produced in 2020] by 14Mt thanks to almost ideal weather for winter wheat and good weather for spring wheat,” Sovecon principal Andrey Sizov said.

Russian wheat exports are picking up after it has regained its competitive edge.

Should see 1+mmt this week for the first time in many months.

September volume is however estimated at 4.3 mmt, not bad, but still below the average 4.6 mmt.

In this context, as of September 28, the export duty on wheat will decrease to 2,476.6 from 2,668.3 rubles per ton a week earlier.

The duty on barley, also will decrease to 2,152.6 rubles from 2,353.9 rubles per ton a week earlier.

Also for corn it will down to 3,659.9 rubles from 3,696.5 rubles a week earlier.

This new duty rates will be in effect through October 4, inclusive.

The duties were calculated based on indicative prices: $308.2 per ton for wheat ($311.9 a week earlier), $281.8 for barley ($285.8), $317.6 for corn ($317.6).

From Ukraine, Ukraine’s 2023 wheat crop may decrease to 16Mt to 18Mt, down from 19Mt this year due to an expected fall in the winter wheat sowing area, first deputy agriculture minister Taras Vysotskyi said on Tuesday.?

Ukrainian ag officials have said the area under winter wheat could fall by at least 20pc due to Russian occupation of some areas of the country as farmers prefer to sow oilseeds that have stable export demand.

Ukraine’s 2022 corn harvest is just underway, with the country’s agriculture ministry reporting a progress of 0.5% so far.

Ukraine's 2022 total grain harvest could total between 54.1 to 55.7 million tonnes compared with a record 86 million tonnes.

According to APK-Inform, the harvest could include 19 million tonnes of wheat, 30 million tonnes of corn and 5.5 million tonnes of barley.

The consultancy also said a smaller harvest and logistical difficulties could cut 2022/23 July-June exports to between 22.6 and 38.8 million tonnes.

Ukraine's sunflower oil output could total between 3.5 and 4.9 million tonnes in the 2022/23 season compared with 5 million tonnes in 2021/22.

The consultancy also said that sunoil exports could be between 3.0 and 4.6 million tonnes in 2022/23 depending on the sunflower seed harvest and the logistical situation.

Meantime, recent rains in southern Ukrainian regions have improved conditions for continuing winter grain sowing, the state weather forecasting centre said on Friday.

It said in a report that soil moisture in mid-September is among the most significant in Ukraine over the past 10 years.

"Areas where a deficit of productive moisture was observed were small and were in Odesa, Kherson and Zaporizhzhia regions," it said.

On the other hand, a total of 211 ships with 4.7 million tonnes of agricultural products on board have left Ukraine so far under the grain deal, the Ukrainian infrastructure ministry said on Saturday.

The ministry said eight ships with 131,300 tonnes of agricultural products are due to leave Ukrainian Black Sea ports on Saturday.

From Kazakhstan, the Ministry of Agriculture recently suspended its restriction on wheat and wheat flour exports.?

The ministry reported that 70% of the grain crop was harvested as of September 13 and that yield estimates are 30% higher than last year.?

The ministry estimates that production in the marketing year 2022/23 will total 13 MMT.

From the Middle Kingdom, the central Chinese province of Jiangxi has declared a water supply "red alert" for the first time after the Poyang freshwater lake, the country's biggest, dwindled to a record low, the Jiangxi government said on Friday.

The Poyang Lake, normally a vital flood outlet for the Yangtze, China's longest river, has been suffering from drought since June, with water levels at a key monitoring spot falling from 19.43 metres to 7.1 metres over the last three months.

The Jiangxi Water Monitoring Centre said Poyang's water levels would fall even further in coming days, with rainfall still minimal.?

Precipitation since July is 60% lower than a year earlier, it said.

Though heavy rain has relieved the drought in much of southwest China, central regions continue to suffer, with extremely dry conditions now stretching more than 70 days in Jiangxi.

State weather forecasters said this week that drought conditions still prevailed in the middle and lower reaches of the Yangtze, and efforts were required to seed clouds and divert water from elsewhere.

China will once again sell another 500.000t of its state imported soybean reserves in an auction that will be held on September 30.?

The country has routinely offered similar sales throughout the year to keep local supplies boosted and cool high prices.

Meantime, Chinese Dalian Corn Prices were down by 1.37% to 2,733 yuan as of 9/15.?

Dalian No2 Soybean Prices were up on Thursday to the strongest reading since May of ’22.?

From South East Asia, the Xinhua News Agency reported that Pakistan's wheat imports had increased 2,435% during the first two months of fiscal 2022, while the import cost has risen from 2.70 billion rupees in 2021 to 68.49 billion ($287.5 million) for the same period in 2022.?

Food imports overall have increased 65.45% in the first two months while the value of food imports has shot up over 150 billion rupees.?

This year, Pakistan suffered catastrophic flooding resulting in massive crop destruction and delayed wheat plantings.?

In an interview with Bloomberg Television, Pakistan's Prime Minister described the situation as a "nightmare" and said he fears that farmers will be unable to plant wheat this season because so much of the land is underwater.

Malaysian palm oil prices will plunge to 2,500 ringgit ($547.29) by the end of December, weighed down by improving production, demand destruction and a slowdown in major economies, leading analyst Dorab Mistry said on Friday.

Malaysia's benchmark crude palm oil prices will decline to 3,000 ringgit ($656.74) a tonne by end-Sept and continue tumbling to its lowest since mid-July 2020 by year-end, Mistry, director of Indian consumer goods company Godrej International, said.

The contract rallied to a record high in March, surpassing 7,000 ringgit ($1,532.23), but prices have corrected by nearly 50% since.

High prices had caused demand destruction and the low production seen earlier in the year is now recovering strongly.

Mistry pegged Malaysia's production in 2022 to rise to 18.2-18.5 million tonnes, compared with 18.1 million tonnes last year.?

Output in the largest producer Indonesia is seen rising by 3 million tonnes.

For the 2022/23 season, Mistry has a bearish outlook and sees a possibility of a recovery after December 2022 in equities.

He also said Indonesia should scrap all export taxes on palm oil exports until December 2022 to bring down stocks, which are weighing on the prices.?

($1 = 4.5680 ringgit).

India's palm oil imports could jump 23% in 2022/23 to an eight-year high of 9.5 million tonnes.

Palm oil futures have dropped nearly half from their record highs and palm oil is again at a sizeable discount to rival oils.

Palm oil is offered at $950 a tonne including cost, insurance and freight (CIF) to India for October shipment, compared with $1,250 for crude soyoil.

Higher palm oil imports could bring down the country's soyoil imports to around 3 million tonnes from 4.1 million tonnes in the current year ending Oct. 31.

From Australia, more rain in southern Queensland and central and northern New South Wales, combined with the weaker Australian dollar and offshore market strength, have lifted values in the northern market this week.

In the southern market, barley is trading sideways and wheat values have softened based on consolidating prospects for bumper yields.

Trade sources say volume has been minimal, with the National Day of Mourning for Queen Elizabeth II yesterday, and the AFL Grand Final holiday in Victoria, reducing the number of market participants on deck.

In this context, indicative delivered prices in Australian dollars per tonne for old crops past week were:

Barley Downs: $375, up $5 from Sep 15;

SFW wheat Downs: $380, unchanged from Sep 15;

Sorghum Downs: $370, up $8 from Sep 15;

Barley Melbourne: $370, unchanged from Sep 15;

ASW wheat Melbourne: $402, down $6 from Sep 15.

SFW wheat Melbourne: $380, down $5 from Sep 15.

Growers continued offering new crops.

Particularly, past week prompts were:

Barley Downs: $375, up $10 from Sep 15;

SFW wheat Downs: $385, up $15 from Sep 15;

Sorghum Downs: $350, down $5 from Sep 15;

Barley Melbourne: $360, unchanged from Sep 15;

ASW wheat Melbourne: $418 down $7 from Sep 15;

SFW wheat Melbourne: $380, down $28 from Sep 15.

(AUD/USD=> US$0.6526 vs. US$0.6721 prior week).

On the international trade scene, an importer group in the Philippines is believed to have bought around 45,000 tonnes of animal feed wheat to be sourced from Australia in an international tender which closed on Thursday.

The wheat was purchased at about $355 a tonne c&f for January 2023 shipment.

Pakistan is on the market for 300k MT of wheat.?

Jordan is also looking for 120k MT of wheat via international tender.?

The IGC raised its forecast for 2022/23 global wheat production, mainly reflecting an upward revision for the crop in Russia.?

It pegged global wheat production at 792Mt in 2022/23, up from a previous projection of 778 million and now above the prior season’s 782Mt.?

Russia is now expected to produce 93.4Mt, up from a previous forecast of 87.6Mt.

Russia's wheat exports in the 2022/23 season were still seen at 36.5 million tonnes, despite the higher production forecast, leading to an expected build-up in stocks in the country.

Stocks of wheat in Russia at the end of the 2022/23 season were projected at 22.5 million tonnes, almost double the prior season's level of 11.3 million tonnes.

The IGC also downwardly revised its 2022/23 world corn (maize) crop outlook by 11 million tonnes to 1.168 billion tonnes, mainly driven by a cut in its forecast for U.S. production to 354.2 million tonnes from 364.7 million.

Watching next week's market, weekly Export Inspections data will be released on Monday afternoon, with the Crop Progress report that overnight, after the sessions close.?

Skip ahead to Wednesday and the EIA will release their weekly report showing ethanol stocks and production.?

On Thursday, we will see the weekly FAS Export Sales report in the afternoon.?

Friday rounds out the week with the often volatile September Grain Stocks report and Small Grains Summary from NASS.

That's all, thank you.

We wish you a good day and a good weekend.

Author: Sandro F. Puglisi??

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