GRAIN & PRICES WEEKLY REPORT

Good morning Farmer Family ...

US farm markets ended Friday's session with mixed results.

Corn prices, after a choppy session, were fractionally higher at the bell (+0.04%).

Soybeans held onto gains of around 0.8% in the last trade day of the week.?

Meal prices closed with 1.16% gains.?

Bean oil prices ended 0.85% higher.

The wheat complex, added more to the downside on Friday, as Chicago SRW closed 0.43% in the red; Kansas City HRW prices ended down by 0.4% and Minneapolis spring wheat closed with 0.24% loss.

Corn prices failed to find much momentum in either direction, as traders set their positions, ahead a shorted week due Thanksgiving holiday.?

Soybeans firmed despite no fresh fundamental news have been, as the market still was digesting Thursday's weekly export sales report from the USDA, which showed U.S. soybean sales for the last reporting week, above 3 million tonnes.

However, worries about future demand from China hung over the market, as the country is facing a rise in COVID-19 cases, raising fears?that it could curb demand for commodities.

Wheat prices, meantime, extended their losses, following news this week of the extension of the corridor for grain exports from Ukraine.?

Lack of fresh supportive news and a firmer dollar, made an additional down pressure.

Rumors of further sales of French wheat to China and of possible sales of northern European wheat to the United States underscored how U.S. wheat remains uncompetitive globally.

Meantime, corn basis bids rose 5 to 13 cents higher at three Midwestern ethanol plants on Friday, while were mixed across several other locations in the central U.S..

Soybean basis bids were mostly steady across the central U.S. but did tilt 5 cents higher at an Iowa river terminal while sliding 2 to 20 cents lower at two other Midwestern locations.

For the week, corn prices saw a rebound, as December was up 1.48%, from last Friday.

Soybeans dropped another 1.50% on the week.?

Soybean oil was a large reason for the weakness, as December contract was down 5.5%.?

Meal prices, in contrast, posted a 0.74% gain.?

The wheat complex was mixed across the three exchanges this week.?

Chicago was again the weakest, down 1.29%.?

Kansas City HRW contracts were 0.98% lower from Friday to Friday.?

Minneapolis, in contrast, was up 0.61%.?

Going inside numbers, for the week, corn prices closed $0.098 higher at $6.68/bu.

Soybean prices finished the week $0.217 lower at 14.28/bu.

Soymeal rose $3/smt, closing at $410.40 smt.

Soy oil tumbled by $4.230, to close at $72.74.

CBOT soft red winter (SRW) prices fell $0.105 to close at $8.03/bu.

KCBT hard red winter (HRW) prices lost $0.093, ending at $9.34/bu.

MGE hard red spring (HRS) prices were $0.058 higher to close at $9.52/bu.

Wheat basis was mixed in both the Gulf and PNW this week.?

Wheat traders noted that while export prices need to soften to attract export business, a strong domestic market is keeping basis from softening more.?

Farmer selling is slow, leading to a slight increase in HRS basis in the Gulf and a firm HRS basis in the PNW.?

Railroads originated more grain carloads this week than last, and secondary rail rates decreased week-over-week.?

However, challenges with railroad logistics remain said one wheat trade.?

In this context, as at November 17, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $425/mt (up $4/mt from last week).

US wheat No 2 Soft Red Winter (SRW) was valued at $363/mt (up $2/mt from last week).

Northern Durum offers from the Great Lakes for December 2022 delivery was valued at $12.24/bu, up $0.41/bu wk/wk ($450.00/MT + $15).

As for corn, US corn 3YC (Gulf) was at $330/mt (down $8/mt from last week).

As for soybean, US soybean 2Y (Gulf) quoted at $594/mt (down $17 from last week).

USDA cited cash ethanol prices from $2.14 to $2.40/gal regionally this week, mostly 10 to 35 cents lower.

Corn oil cash prices were 1 to 3 cents/lb higher through the week, from 78 to 84 cents/lb regionally.?

DDGS prices were $215 to $260 regionally, mostly lower but within $15/ton regionally of last week’s quotes.

DDGS prices to the Export Point averaged between $242.50 to $348/ton, unchanged from prior week.

USDA reported cash B100 from $7/gal in MN (UNCH) to $7.32/gal in IL (+44c/gal) for the week.?

After the sessions close, CFTC’s weekly Commitment of Traders report showed managed money liquidating 57k longs in corn for a 176,831 contract net long as of 11/15.?

That was their weakest net long since 8/16.?

Commercials also reduced exposure, closing 36.4k shorts for a 424,628 contract net short as of the Tuesday close.?

As for soybean, managed money weakened their net long by 10.9k contracts by rolling existing longs to shorts.?

That left the group 92,965 contracts net long as of the 11/15 close.?

Commercial soybean hedgers reduced their net short during the week by adding new long hedges, CFTC had them 134,665 contracts net short.?

In the products, spec traders closed 14.9k meal longs for a 19.7k weaker net long of 75,710 contracts.?

The funds were 5,161 contracts more net long in soy oil through the week to 110,371 contracts.?

That was their strongest net long since Feb of 2021.?

As for wheat, Weekly CFTC data showed CBOT wheat specs were 46,780 contracts net short as of 11/15.?

That was a 3,878 contract stronger net short through the week, by more long liquidation.?

In HRW, the funds were reducing their net long by 3,152 contracts to 21,281.?

In MGE HRS wheat, managed money traders were 2,897 contracts less net long, to just 158 contracts, after a sharp long liquidation through the week (54% of existing spec longs were closed).?

In energy markets, recession concerns have dominated this week.

Oil dropped by about 2% on Friday, logging a second weekly decline, due to concern about weakened demand in China and further increases to U.S. interest rates.

Notabily, Brent crude settled at $87.62 a barrel, falling $2.16, or 2.4%.?

U.S. West Texas Intermediate (WTI) crude settled at $80.08 a barrel, losing $1.56, or 1.9%.

Both benchmarks posted weekly losses, with Brent down about 9% and WTI roughly 10%.

A stronger U.S. dollar, pushed down crude prices.

China, which sources say is looking to slow crude imports from some sources, has seen a rise in COVID-19 cases, while hopes for less aggressive U.S. rate hikes have been dented by remarks from some Federal Reserve officials.

In ocean freight markets, the Baltic Exchange’s dry bulk sea freight index BDI, fell to a more than two-month low on Friday and posted a weekly decline as demand for capesize vessels dropped.

The overall index, indeed, shed 39 points, or 3.2%, to 1,189, its lowest since Sept. 8.

The main index dropped 12.3% for the week, its fifth weekly fall in six.

The capesize index lost 66 points, or about 5.6%, to 1,122, extending its declines to a sixth straight session.

The index posted a weekly fall of 27.3%.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes of coal and steel-making ingredient iron ore, decreased $550 to $9,305.

The panamax index fell 56 points, or 3.4%, to a 10-week low of 1,594.?

It was down 2.6% for the week.

Average daily earnings for panamax vessels, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, decreased $507 to $14,343.

The supramax index lost 5 points to 1,170 and fell for a sixth straight week.

In equity markets, a late-afternoon rally on Wall Street helped stocks close higher Friday.

However, the major indexes still wound up finishing lower for the week.

Notabily, the S&P 500 rose 18.78 points, or 0.5%, to 3,965.34.?

The Dow rose 199.37 points, or 0.6%, to 33,745.69.?

The Nasdaq added 1.10 points, or less than 0.1%, to close at 11,146.06.

Smaller company stocks also gained ground.?

The Russell 2000 rose 10.61 points, or 0.6%, to 1,849.73.

Discount retailer Ross Stores surged 9.9%.

Clothing retailer Gap rose 7.6%.?

Foot Locker climbed 8.7%.

These solid earnings from retailers had cap off a shaky week for Wall Street.

The markets were also pleased with the news that U.S.?

Trade Representative Katherine Tai on Friday met with Chinese Commerce Minister Wang Wentao on the sidelines of an Asia-Pacific Economic Cooperation ministers meeting in Bangkok.??

That was the first meeting between the new U.S.-Chinese trade ministers and could signal that trade relations might thaw by enough for the Biden administration to drop some of the Trump-era U.S. tariffs on $300 billion of Chinese imports.??

Dropping those tariffs could reduce U.S. inflation pressures and give the Fed a little more flexibility, and also boost U.S. corporate profits by allowing lower input prices.

However, investors tried to get a better sense of inflation's path and its impact on consumers and businesses.?

Friday’s economic news showed Oct U.S. existing home sales, fell by -5.9% to 4.43 million units, which was a negative factor for the housing market.??

However, that was at least slightly better than expectations for a decline to 4.40 million.??

Friday’s Oct U.S. leading economic indicators report fell by -0.8% m/m, much weaker than expectations of -0.4%.??

The Sep LEI was revised lower to -0.5% from -0.4% m/m.

Meantime, bond yields continued to rise.??

The 10-year T-note yield on Friday rose by +6 bp to 3.82%, adding to Thursday’s +8 bp rise.?

Still, the 10-year yield is trading at a comfortable half-percentage-point below the mid-October 15-year high of 4.34%.

As a result, the major indexes all finished down for the week and remain sharply lower so far this year.

Notabily, the S&P 500 fell 0.7% this week, the Nasdaq fell 1.6%, while the Dow was basically unchanged.

In currency trading, the dollar index on Friday was up 0.19% at 106.90 after falling 0.33% earlier in the day.

It was up about 0.58% week-to-date, in its biggest gain since early October and representing a partial recouping of last week's 4% losses.

Notabily, the dollar gained slightly on Friday, as investors eyed rising bond yields and continued to make bets on the U.S. Federal Reserve's interest rate hiking path.

The euro was down 0.34% against the dollar at $1.0329 after earlier rising as much as 0.29%.?

The pound pared gains against the greenback and was last up 0.22% after rising as much as 0.70% earlier.

Both the euro and sterling had hit multi-month highs against the dollar earlier this week after inflation data showed an easing in U.S. price pressures.

Against the yen , the dollar was up 0.8% at 140.32 yen.?

The Australian dollar was down 0.21% at $0.6672, below a two-month high reached earlier this week.

The New Zealand dollar , meanwhile, was up 0.28% and headed for its fifth straight weekly gain.

Going back to analyzing the other agricultural markets ...

From Canada, Agriculture Canada forecasts Canadian wheat ending stocks to total 6.2 MMT, significantly higher than the 4.17 MMT

forecast by USDA in the latest WASDE report.?

Market farm analyst Bruce Burnett said the significant difference is due to methodology.?

Burnet said that if the Canadian export program is strong, ending stocks by the end of July 2023 will be extremely tight.?

USDA's forecast is the second lowest since 1960; the lowest was in 2021/22 at 3.67 MMT.

Meantime, producers' deliveries of common wheat in week 15 of the shipping season, were at 280,1k mt.

That was sharply down from 428,9k posted a week erlier.

Deliveries of durum wheat, were also down to 105,6k mt from 147.7k mt a week earlier.

Meantime, Canada exported 417.9k mt of common wheat in week 15 of the shipping season.

That was down from 488.8k mt posted a week earlier.

Durum wheat exports, also were weaker at 97.4k mt, down from 179.2k mt a week earlier.?

Consequentially, total Commercial Stocks of common wheat stood at 2.601,4k mt, down from 2.654,0k mt a week earlier.

Durum total commercial stocks were also weaker at 764,6k mt, sligthly down from 777,9k mt posted the prior week.?

Cumulative exports for common wheat are now at 5.533,4k mt, up from 3.731.5k mt year ago to date.?

As for durum wheat, cumulative exports reached 1.077,9k mt, up from 995,4k mt year ago to date.?

Cash bids for durum wheat continued to be higher this week.?

Indeed, looking at the average regional price of C$499.99/mt as of Nov 18, that is C$0.43/mt higher than the prior week.

Going inside the numbers of the week, as at November 14, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):?

- for the N1 class CWRS 13.5% - $515.77 per tonne, down C$7.98/t from prior week;?

- for the N2 class CWRS 13.0% - $509.68/t, down C$7.83 wow;

- for the N3 CWRS - $533.85/t, down C$8.23 from prior week.

As at November 14, 2022, for the N1 CWAD 13% (durum wheat first class) average street price were at C$496.04, unchanged week on week.

Meanwhile the export basis West Coast & Central SK, moved up from C$70.32 to 81.76 a tonne.

Thus, delivered FOB price Great Lakes was posted at C$577.80 (US$ 431.65/t +$12 wk/wk).

That represent a C$11.44/t increase from prior week.

Per latest data from European Commission, as at November 16, 2022, Durum wheat - FOB CA St Lawrence (CWAD) was offerd at C$633.84/t ($475/t +$15/t), up C$13.64/t week on week.

As at November 18, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES was at C$499.99 per tonne, up C$0.43 from prior week.

(1USD=Cnd$1.3386 down from 1.3251 a week earlier).

From South America, Brazilian consultancy Pátria AgroNegócios is expecting an uptick in soybean planted acres for the 2022/23 season and also adjusted its production estimates higher, to 148.9 MMT – a record-breaking effort, if realized.?

However, the group also noted that climate forecasts could bring drier-than-normal conditions to the country’s South and Southwest production regions.

Meantime, Argentina is looking into the possibility of reinstating a special exchange rate for soybean farmers, a move that is intended to boost exports.?

However, Argentina’s Buenos Aires grains exchange reported yesterday unless more rains arrive soon, it may make cuts to its soybean acreage estimates.?

Plantings are only 12% complete, compared to 29% at the same time a year ago.?

Current projections are calling for 41.3 million acres.?

Argentina is the world’s No. 1 soymeal and soyoil exporter.

Prolonged drought conditions in Argentina has the country’s Buenos Aires grains exchange slashing its estimates for the 2022/23 season by nearly 40% to 12.4 MMT.?

Argentina’s Economy Ministry estimates the wheat crop at 13.4 MMT for 22/23, a 39.4% drop from 21/22.

Harvest is 10% complete through November 16.

In this context, as at November 17, 2022 - Argentina Wheat Grade 2 export price, (Up River) was at $419, up $8/t from prior week.

Argentina corn feed was up $1/t for the week, closing at $301.

Brazilian corn feed (Paranagua) was valued at $299, was up $7/t from prior week.

Argentina feed barley, was unchanged for the week to $360.

Argentina soybean was down $3 at $597.

Brazilian soybean was down $14, finishing the week at $603.

In Europe, December wheat prices on Euronext closed the week at 325.75 euros a tonne, down €1.75/t for the week.?

December's European Durum Wheat, settled at €499.5/t, down €13/t for the week.?

March corn price, was down €13.25/t for the week, closing at 306.75 euros per ton.

Rapeseed Feb contract closed at €610.25/t, down €20.25/t for the week.

Jan 23 UK wheat feed contract, closed closed at ￡257.75, down ￡6.4/t week on week.

Meantime, as of November 17, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Oct delivery, were at $341/mt, up $1 from prior week.

German wheat, Deposilo Hamburg, was valued at $344.82/t, down $18.61 from prior week.

Baltic wheat, delivery first Vilnius, past week was at $329.34, down $8.20 from prior week.

Spanish durum wheat Sevilla (Depo Silo), was valued at $516.2/t down $1.5 from prior week.

French durum wheat - delivered La Pallice Spot - July 2022 basis, this week was valued at $480.06/mt, down $1.39 from prior week.

French durum wheat - FOB Port la Nouvelle, this week was at $505/t, past week not quoted.

Italian durum wheat Bologna (Delivered to first customer), was valued $503.81/t, down $6.64 from prior week.

Corn, delivered Bordeaux Spot - July 2022 basis, was at $321.08 per tonne, down $16.46/t from past week.

Corn FOB Rhin Spot - July 2022 basis, was down $12.31 to $316.95/t.

Feed barley delivered Rouen was at 301.46$/t, down $10.2 per tonne.

Malting barley FOB Creil Spot - July 2022 basis was at $379.92 per tonne, down $1.12/t from prior week.

Rapessed FOB Moselle - 2022 harvest was at 619.44$/ton, down $40.11 compared to prior week.

Standard sunseed FOB Bordeaux - 2022 harvest was down 58.99$ from prior week at $702.03 per tonne.

(Eur/USD = 1.0324 vs last week 1.0354).

The European Union's (EU) non-durum wheat exports so far in 2022/23 are 13.25 MMT, according to data from the European Commission.?

Thus, current exports were nearly 10% ahead of the same time a year ago.?

France remains the largest wheat exporter at 5.46 MMT, while Romania, Germany, Latvia, and Poland followed, shipping less than 2.0 MMT each since the July 1 export calendar began.

French farm office FranceAgriMer reported that 97% of the country’s 2022/23 soft wheat crop has been planted as of November 14.?

The country struggled with widespread drought last season, but so far, weather has been mostly favorable for producing a high-quality, high-yielding crop.?

Nearly all (98%) of the crop is currently rated in good-to-excellent condition.?

France is Europe’s top wheat producer.

From Russia, Sovecon on Friday had reduced its forecast for Russia's sunflower seed crop this season due to rains.

Notabily, Sovecon reduced the crop estimate by 900,000 tonnes to 16.1 million tonnes due to significant delay in harvesting in the central and Volga regions of the country.

As of Nov. 10, Russian farmers had produced 11.6 million tonnes of sunseeds from 6.4 million hectares compared with 15.1 million tonnes from 9.5 million hectares around the same date a year ago.

The harvesting of the current sunseeds crop is lagging badly.?

Only 64% of the area has been harvested so far, whereas typically it is above 90% at this time of the season.

The last time such a low harvesting pace was recorded was in 2017, when 15% of the fields were left unharvested, Sovecon said.

Meantime, the Russian agriculture ministry revised the export tax for wheat, corn and barley.

Particularly, as of Nov. 23, the export duty on wheat will decrease to 2,735.2 from 2,922.1 rubles per ton a week earlier.

The duty on barley, will also decrease to 2,430.0 rubles from 2,686.7 rubles per ton a week earlier.

Ditto for corn, that will down to 193.8 rubles from 447.5 rubles a week earlier.

This new duty rates will be in effect through November 29, inclusive.

The duties were calculated based on indicative prices: $312.5 per ton for wheat ($312.3 a week earlier), $286.7 for barley ($288.5), $233.9 for corn ($236.4).

From Australia, compounding effects of rain and flooding are driving apart prompt and new-crop prices in southern markets as harvest delays and logistics issues confound any hopes of volume off-the-header business for the rest of this month.

In the northern market, values have softened as new-crop from Queensland and pockets of northern New South Wales provide sufficient volume to cover consumers’ nearby needs.

Grade spreads for milling wheat and malting barley over feed have blown out this week to reflect the impact of rain and unseasonably cool weather on grain quality, and cottonseed prices have shot up in response to logistics problems caused by flooding in New South Wales.

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

Barley Downs: $360, down $15 from Nov 10;

SFW wheat Downs: $385, down $10 from Nov 10;

Sorghum Downs: $430, up $5 from Nov 10;

Barley Melbourne: $410, up $20 from Nov 10;

ASW wheat Melbourne: N.Q., on Nov 10 was valued at $460;

SFW wheat Melbourne: $480, up $50 from Nov 10.

For delivery in Jan-Feb indicative prices were:

Barley Downs: $370, down $10 from Nov 10;

SFW wheat Downs: $385, down $13 from Nov 10;

Sorghum Downs: $380, down $40 from Nov 10;

Barley Melbourne: $385, up $15 from Nov 10;

ASW wheat Melbourne: $440 down $10 from Nov 10;

SFW wheat Melbourne: $415, down $10 from Nov 10.

(AUD/USD=> US$0.6672 vs. US$0.6707 prior week).

Main News of the Week?

From the Black Sea basin, Ukraine and Russia agreed to extend the Black Sea Grain Agreement.?

The deal, which Turkey and the United Nations (U.N.) brokered, allows grain exports from Ukraine's Black Sea ports.?

The deal is good for at least 120 days (4 months).

As the last few months have proven, Ukraine’s export abilities are highly dependent on the ability to ship cargo via the Black Sea.?

Unfortunately, there’s not currently a viable “Plan B” to move grain by truck and/or rail.?

The maximum export capacity via ground transportation is currently around 2.7 million metric tons per month, per data tabulated by European trade association Coceral.

The International Grains Council left their world corn production forecast at 1.166b MT.?

Trade was reduced by 2 MMT to 170 MMT.?

Estimated ending stocks were 1 lighter to 257 MMT.?

The International Grains Council (IGC) lowered its 2022/23 global wheat production forecast to 791 MMT, 1 MMT lower

than IGC's previous estimate.?

Revisions were mainly due to Argentina's shrinking wheat crop.?

ICG's estimate is 1% larger than the 783 MMT USDA forecast in its November Supply and Demand estimates.

From the Middle Kingdom, China’s custom’s data showed 550k MT of corn was brought in during October – that was a 58% lower volume yr/yr.?

Through the calendar year, China has imported 27.5% less corn than 2021 at 19.01 MMT.?

China’s Customs also reported wheat imports were 1.24 MMT in October, a 157% increase yr/yr.?

Through October of ’22, Customs tracked 7.87 MMT of wheat – a 2.6% lighter volume than the same time in 2021.?

From South East Asia, high commodity prices has lead to an increase in India’s wheat and canola acres, which are up 15% year-over-year, per the latest data from the country’s farm ministry.?

Indian farmers have planted wheat on 4.5 million hectares since October 1, up 9.7% year-over-year, according to data from the Indian farm ministry.?

Hot weather in March severely affected the 2022 crop and curtailed plans for Indian wheat exports while driving local prices up 27% since May.?

Inventories are at a multiyear low, creating additional incentive to replenish domestic stocks.?

Late rains in October and November increased soil moisture boosted planting, said growers.?

India is the second largest wheat producer in the world.

On the international trade scene, Tunisia's state grains agency bought about 75,000 tonnes of barley in an import tender on Friday, less than initially thought.

It was earlier reported the agency had booked 100,000 tonnes, in line with what it had sought in the tender.

However, later was estimated the purchase at 75,000 tonnes, comprising one 25,000 tonne consignment sold by trading house Casillo at $343.89 a tonne, cost and freight (c&f) included, another 25,000 tonnes from Casillo at $344.89 a tonne c&f, and 25,000 tonnes from ADM at $339.91 a tonne c&f.

The grains were sought for shipment between mid-December and late January, depending on the origin supplied.

The results were provisional and still subject to changes.

Watching next week's market, the Thanksgiving week starts out with the weekly Export Inspections report on Monday in the afternoon, and Crop Progress report, overnight after the sessions close.?

USDA Cold Storage data will be released on Tuesday.?

Skip ahead to Wednesday and EIA will release weekly ethanol production and stocks data.?

US markets and government will be closed on Thursday in observance of Thanksgiving.?

That pushes weekly Export Sales data to Friday in the afternoon.?

The markets open back up on Friday at 8:30 CST, with a shortened session.?

Friday will also mark expiration of the December grain options.

That's all, thank you.

We wish you a good day and a good weekend.

Author: Sandro F. Puglisi??

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