GRAIN & PRICES WEEKLY REPORT
S.W.B. - Sicilian Wheat Bank - La Banca del Grano S.p.A.

GRAIN & PRICES WEEKLY REPORT

Good afternoon Farmer Family ...

All grain and oilseed markets were down this week.

Concern about a potential recession, due Fed's rate increase, hurt some commodities.

Crude oil prices were down less than 1%, but did influence the biofuels.?

Also, some analysts blamed the cooler long range weather forecast.

Meantime, corn prices collapsed with the July contract down 4.37%, while the new crop Dec 7.8% lower for the week.?

Soybeans joined the bear parade, as contracts fell 5.36% in nearby July and 7.37% for November.?

Product values also headed lower, with meal down 1.26%, while soy oil dropped another 5.47%.?

Malaysian palm oil again was a culprit.?

Wheat prices, drove the downtrend in the grain complex, in spite it head towards a harvest low.?

Chicago SRW, indeed, was down 10.68%.?

Kansas City lumped a 10.18% drop.?

Minneapolis HRS bulls held themselves together a shade better, but July was still down 8.44%.?

Going inside the numbers, during the week CBOT corn prices, closed down $0.342 at $7.50/bu.?

CBOT soybean prices finished the week $0.912 weaker at $16.11/bu.

Soymeal eased by $5.5/smt at $432.6 smt.

Soy oil shedded $4.04 cents, to close at $69.75.

CBOT soft red winter (SRW) prices fell $1.105 to close at $9.24/bu.?

KCBT hard red winter (HRW) prices lost $1.125 ending at $9.93/bu.

MGE hard red spring (HRS) prices shedded $0.988 to close at $10.71/bu.

Meantime, as of June 23, 2022, FOB prices saw US corn 3YC (Gulf) was at $339/mt (down $14/mt from last week).

US soybean 2Y (Gulf) quoted at $630/mt (down $46/mt from last week).

As for wheat, US wheat No 2 Hard Red Winter (HRW) was valued at $430/mt (down $51/mt from last week).

US wheat No 2 Soft Red Winter (SRW) was at $365/mt (down $53/mt from last week).

On the other hand, USDA reported the weekly average corn oil prices ranged 75.7 to 74.83 c/lb regionally through the week that ended 6/24.?

That compares to last week’s 76.2 to 77.5 cent prices.?

DDGS FOB prices were $300-$308/ton in the Gulf, compared to $322 in the PNW and $290-$302 in the Gulf last week.?

Cash ethanol prices also came down 7-9 cents/gal to $2.61-$2.77/gal.?

USDA reported the average cash B100 prices were $6.97/gal in IA during the week of 6/24 – down 57 c/gal wk/wk.?

Meanwhile gasoline futures ended the week at $3.8388, that was up from $3.6829/gal posted last week.

USDA’s weekly Crush report, showed processing value of soybeans at $18.90/bu on $16.43 cash beans.

Past week showed processing value of soybeans was at $19.44/bu on $17.50 cash beans.

On the weather side, temperatures this week were above average for much of the central and eastern parts of the U.S. Soil moisture conditions quickly deteriorated across the Central and Southern Plains states due to the heat wave.?

In North Dakota and northern Minnesota, below-normal temperatures have delayed crop development.?

Montana, Wyoming, and Colorado weather conditions have allowed targeted improvements following active storms.?

In the PNW, below-normal temperatures and persistent storm tracks have improved soil moisture but slowed crop development.

Meantime, most of the Midwest and Plains will see at least some measurable rainfall between today and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA.?

Northern Iowa and Minnesota are likely to gather the largest amounts during that time. NOAA’s 8-to-14-day outlook anticipates seasonally wet weather returning to the Plains and western Corn Belt between July 1 and July 7, with abundant warmer-than-normal conditions likely across most of the central U.S.

On the supply side, day 9 of the KS wheat harvest reports were mostly Central West.?

Yield reports were much better with 35-80 bpa near Scott County with solid protein levels.?

A report from Wichita County said yields were near 64 bpa.?

Ness reported lower 25-50 bpa yields and 11% protein having missed some of the early spring rains.?

On the demand side, data from the EIA, this week, were delayed due to a systems issue.?

On Friday, USDA reported old crop corn sales surged by 377%?to 671,919 MT during the week that ended 6/16.?

While exports shipments slip 17% to 1.147 MMT, brough the season’s total to 50.216 MMT.?

That is 80.7% of USDA’s forecast.?

New crop sales were at 358,407 MT.?

As for soybean, old crop export sales were marked at 29,348 MT.?

That was a MY low.?

USDA reported 494,055 MT were shipped during the week.?

That was down 30% from last week but was double the same week last season.?

The 51.2 MMT shipped MYTD makes up 87% of USDA’s forecast.?

For new crop, the weekly report had 264,978 MT sold.?

For the products, USDA reported soymeal bookings were a net 8,248 MT of cancelations for 21/22 delivery and a net 42,325 MT of new sales for 22/23 delivery.?

Bean oil bookings were 1,376 MT during the week that ended 6/16. MYTD exports for meal were 8.67 MMT through 6/16 and 602,772 MT for soybean oil.?

As for wheat, data showed 477,776 MT of wheat was sold during the week of 6/16.?

Japan and Mexico were the top buyers, each with about 163k MT.?

That was up 57% from the week prior but was 10% lower yr/yr.?

USDA reported 336,344 MT of wheat exports during the same week, setting the pace at 918,503 MT through the first 2+ weeks of data.?

In this context, despite the lower inspections figure last week, corn basis along the river and barge rates remained firm and at or above five-year highs as commercial and export demand remains strong.

Soybean basis bids were steady to weak on Friday after dropping 4 to 8 cents lower across four Midwestern locations.

Wheat basis this week was flat in the Gulf, except for HRW, which was down.?

In the Pacific Northwest (PNW) basis was up for HRS and flat for HRW.?

Dry weather is supporting the quick pace of HRW harvest.?

Cooler temperatures and solid moisture benefit the HRS crop.?

Soft white wheat (SWW) prices were significantly down, echoing the fall in CBOT futures this week.?

Nearby soft white wheat is "old crop" explaining the significant difference month-over-month.?

Cool weather in the PNW will delay SWW harvest slightly.

Meantime, Friday ‘s Commitment of Traders report indicated spec funds pared 12,921 contracts from their net long position in the week ending June 21.?

That took their net long to 265,264 contracts by Tuesday.

Commercial corn traders closed 28.7k short hedges reducing their net short to 565,520 contracts.?

As for soybean, the report showed the managed money spec funds reducing their net long by 8,733 contracts in the week ending June 14, putting them net long 154,413 and saving those who did it a ton of money on Wednesday and Thursday.??

The commercial net position shrank by 10.5k contracts to 232,854 as 5k shorts were closed and 5k end user long hedges were added.?

For the products, CFTC reported managed money as 85,909 contracts net long in meal and 50,886 contracts net long in bean oil.?

Those were 7,924 contracts stronger and 12,110 weaker from last week respectively.?

As for wheat, the report showed the managed money spec funds removing another 3,004 contracts from their CBOT net long in the week ending 6/21, taking it to 3,935 contracts.??

The group was 26k contracts net long in mid-May.?

Spec longs in KC trimmed 3,792 contracts from their position that week, bringing it down to 32,594 contracts as of Tuesday night.

Spring wheat spec traders were 12,439 contracts net long on 6/21. That was down by 752 contracts wk/wk.?

In energy markets, oil prices settled up by more than $3 a barrel on Friday, supported by tight supply, but they notched their second weekly decline on concern that rising interest rates could push the world economy into recession.

Brent crude, indeed, settled up $3.07, or 2.8%, at $113.12 a barrel on Friday.?

Meanwhile, U.S. West Texas Intermediate (WTI) crude settled up $3.35, or 3.2%, at $107.62.

For the week, Brent crude was substantially unchanged from the prior Friday, while WTI was down $0.37 a barrel, or 0.34%?

Crude has gained support from the almost total shutdown of output in OPEC member Libya due to unrest.?

On Thursday, the Libyan oil minister said the National Oil Corporation chairman was withholding production data from him, raising doubts over figures issued last week.

OPEC+, meet on June 30 and are expected to stick to a plan to only slightly accelerate hikes in oil production in July and August.?

U.S. energy firms this week added oil and natural gas rigs for a second week in a row in a record 23-month streak of increases, as high crude prices and prodding by the government prompted drillers to return to the wellpad.

The latest weekly U.S. oil inventory figures, which will give a snapshot of supply tightness in the top consumer, have been delayed to next week due to technical issues.

In freight markets, the Baltic Exchange’s main sea freight index fell on Friday and registered a weekly fall, pressured by a drop in rates across vessel segments.

The overall index, indeed, fell 23 points, or about 1%, to 2,331.

The index was down 9.6% for the week.

Particularly, the capesize index lost 23 points, or 1%, to 2,396.?

The index shed nearly 19.8% this week, its worst drop since May 27.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $186 to $19,875.

The panamax index fell 37 points, or 1.4%, to 2,695 points, notching a weekly decline of 5.8%.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000-70,000 tonnes, decreased by $338 to $24,254.

The supramax index edged down 17 points to 2,449.

Meantime, on week 25, freight rates dropped by several dollars in the Azov and Black Sea region.?

Indeed, the rate for a 3K parcel of wheat from Azov to Marmara Sea ports is $47 per ton, Sea Lines shipbrokers report.

There are practically no new contracts for June dates in the grain market.?

Shipments for July are mostly only being calculated.

However, there is no sharp drop in rates in the region due to quite active shipments of coal, as well as the execution of previously concluded contracts by shipowners.

According to Sea Lines, on week 25, freight rates for shipping wheat by 3,000 dwt bulkers from Azov make $45 pmt to the Black Sea, $47 pmt to Marmara, $62 pmt to Mersin and $69 pmt to Egypt.

Freight rates from Rostov AB (after bridge) are $1 above, from Rostov BB (before bridge) the same, from Yeisk and Taganrog $1 below, and from Temryuk $3 below those from the port of Azov.

In the Caspian, freight rates for some destinations declined.

On week 25, freight rates for shipping corn by 3,000 dwt bulkers to Iran make $19 pmt from Aktau, $25 pmt from Makhachkala, and $31 pmt from Astrakhan.

In equity markets, stocks on global markets rallied on Friday and registered strong gains for the week as the slide in commodity prices eased worries about inflation and the rate hike outlook.

Thus, the S&P 500 gained 116.01 points, or 3.06%, to 3,911.74.

that was its biggest daily percentage gain since May 2020.

The Dow Jones Industrial Average rose 823.32 points, or 2.68%, to 31,500.68.

The Nasdaq Composite added 375.43 points, or 3.34%, to 11,607.62.

The pan-European STOXX 600 index rose 2.62% and MSCI's gauge of stocks across the globe gained 2.63%.

For the week, the S&P 500 rose 6.4%, the Dow added 5.4% and the Nasdaq gained 7.5%.

The MSCI global index, meantime, rose 4.8% for the week, snapping three straight weeks of declines.?

We've seen oil prices come down along with other commodity prices, this week.

That is reflecting expectations of a marked slowdown if not an out-and-out recession.

Also, the University of Michigan consumer sentiment survey's reading on five-year inflation expectations was positive for stocks, as it eased to 3.1 from the preliminary 3.3% estimate in mid-June.

In the Treasury market, yields have dropped from more than decade highs reached before last week's Fed meeting.?

Benchmark 10-year yields were last at 3.125%.?

They have fallen from 3.498% on June 14, the highest since April 2011.

In the currency trading, the U.S. dollar fell and posted its first weekly decline this month.

In afternoon New York trading, the dollar index , which measures the U.S. unit against six major currencies, fell 0.23% to 104.013.

The U.S. dollar's slide boosted even commodity-focused currencies such as the Australian dollar and Norwegian crown.?

The Aussie rose 0.8% to US$0.6946.

The euro on Friday rose by +0.0031 (+0.29%) to 1,0554, after comments from ECB President Lagarde, who told EU leaders at a summit in Brussels that conditions are in place for the Eurozone economy to continue to grow and that the ECB “will take” the required steps to tame undesirably high inflation.?

The usd/jpy on Friday rose by +0.29 (+0.22%) to 135.23 as higher T-note yields weighed on the yen.??

The yen also weakened as a sharp rally in stocks has reduced the safe-haven demand for the yen.

In Canada, as of June 20, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):?

- for the N1 class CWRS 13.5% - $602.78 per tonne, down C$18.84/t from prior week;?

- for the N2 class CWRS 13.0% - $596.09/t, down C$13.24 wow;

- for the N3 CWRS - $586.55/t, down C$20.89 from prior week.

As of June 20, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average street prices for delivery in July '22 were at C$597.09 down C$9.19 week on week.

However, export basis West Coast & Central SK increased from C$ 159.05 to 175.59 per tonne, as delivered FOB price Great Lakes was posted at C$772.68, up C$7.35 from prior week.

Meantime, per latest data from the European Commission, as of June 22, 2022, Durum wheat - CA St Lawrence (CWAD) was offerd at C$741.23/t, down $7.77/t from prior week.

As of June 17, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$557.9 per tonne, down C$39.74 from prior week.?

(1USD=Cnd$1.2891 up from past week when was 1.3026).

In South America, as of June 23, 2022 - Argentina Wheat Grade 2 export price, (Up River) was at $470, down $12 from prior week.

Argentina corn feed was down $20/t for the week, closing at $288.

Brazilian corn feed (Paranagua) was valued at $311, down $20 from prior week.

Argentina feed barley, was unchanged for the week to $365.

Argentina soybean was down $50 at $606.

Brazilian soybean fell $44 finishing the week at $620.

In Europe, Paris-based Euronext exchange saw September's wheat prices to close the week at €357.25, an decrease of €34.25 from past week.?

August corn price was down €30.5/t for the week, closing at 307 euros per ton.

Rapeseed for August deadline, fell €70.25/t for the week, to close €696.5/t.?

July-22 UK wheat feed contract, closed at £257.75/t, down £33.75/t week on week.?

Meantime, as of June 23, 2022, FOB prices in US dollar for French wheat with 11.5% protein and June delivery, were at $389/mt, down $40 from prior week.

German wheat Deposilo Hamburg, was at $424.27/t, up $2.17/t from prior week.

Baltic wheat, delivery first Vilnius, was at $392.6/t, down $3.25/t from prior week.

French durum wheat - basis La Pallice, was at $538.25/mt, up $2.75 from prior week.

Spanish durum wheat Sevilla (Depo Silo), was valued this week at $564.64 per tonne, up $13.39 wow.

Italian durum wheat Bologna (Delivered to first customer), was not valued this week.

Corn, delivered Bordeaux port was at $321.9 per tonne, down $31.95/t from past week.

Corn FOB Rhin Spot - July 2021 basis was down $38.28 to $316.62/t.

Feed barley FOB Rouen was at 339.84$/t, down $33.96 per tonne.

Malting barley FOB Creil Spot - July 2021 basis was at $459 per tonne, down $13.4/t from prior week.

Rapessed FOB Moselle - 2021 harvest was at 698.67$/ton, down $103.53 compared to prior week.

Standard sunseed FOB Bordeaux - 2021 harvest was down 116.32$ from prior week at $865.43 per tonne.

(Eur/USD = 1.0554 vs last week 1.0500).

In Russia, Russian export prices for the new wheat crop, which farmers started harvesting, fell past week.

Prices for the new wheat crop with 12.5% protein content and for supply from Black Sea ports, indeed, fell by $5 to $420 free on board (FOB) at the end of last week, the IKAR agriculture consultancy said, adding that the number of sales was still small.?

According to Sovecon, prices for Russian wheat for supply in July were assessed at $403-410 per tonne.

That was unchanged from a week ago.?

Meantime, price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 14,675 rbls/t ($259.73) -300 rbls w/w?(Sovecon).

Price for sunflower seeds was at 29,675 rbls/t -3,025 rbls (Sovecon).?

Price for domestic sunflower oil was at 87,675 rbls/t -6,000 rbls (Sovecon).

Price for domestic soybeans was at 38,200 rbls/t -5,300 rbls (Sovecon).

Export price for sunflower oil was at $1,810/t -$10 (Sovecon).

Export price for sunflower oil was at $1,570/t -$80 (IKAR).

Price for white sugar, Russia's south was at $914.4/t -$19 (IKAR).

($1 = 53.4000 roubles)

In Russian domestic market, wheat prices fell due to low demand, higher supply and a stronger rouble.

Meantime, Russia has set out its grain export taxes for June 29 - July 5, 2022.

It will increase for wheat to $146.1 per ton against $142.0 per ton this week, according to the materials of the Ministry of Agriculture.?

The duty on corn also will increase to $88.7 from $86.5 a week ago.

For barley remains unchanged to $117.5, meantime.

The wheat rate is calculated based on the indicative price of $404 per ton, for barley — $352.5 per ton, for corn $311.8 per ton.

That, it's compared with the prior week when indicative prices were at $399.4 per ton for wheat, $352.5 per ton for barley, $308.6 per ton for corn.

Russia may gradually switch state export taxes for grains and sunflower seeds to the rouble currency from the U.S. dollar, the Interfax news agency reported on Thursday.

"Government ministries are discussing modernisation of the grain and sunflower seeds' tax mechanism to preserve profitability and investment attractiveness of the Russian farmers," the source said, according to Interfax.

"It is a matter of giving a certain discount to the export duty, taking into account the risks of declining profitability of production. This will not affect the domestic prices, but will support exports," the unidentified source added.

Russia exported only 220,000 tonnes of grain last week compared with 340,000 tonnes a week earlier.

Meantime, spring grains were planted on 28.6 million hectares as of June 10 vs 29.4 million hectares a year ago.?

In Ukraine, according to APK-Inform, the indicative export prices of Ukrainian barley remained quite stable last week.

Thus, the indicative offer prices of old-crop and new-crop barley stayed at 370-390 USD/t FOB (June) and 360-385 USD/t FOB (July-August) correspondingly in the ports of the Black Sea.

Meanwhile, the export prices of Ukrainian old-crop wheat decreased slightly last week.

Ditto for the prices of new-crop grain.

Particularly, the indicative offer prices of old-crop 12.5%, 11.5% and feed wheat totaled 420-435, 415-430 and 370-390 USD/t FOB deep-sea ports (June - early July) at thje end of last week.?

Meanwhile, the indicative offer prices of new-crop 12.5%, 11.5% and feed wheat increased to 420-435, 415-430 and 385-400 USD/t FOB (July-August).

As for the export prices of Ukrainian corn, they were quite stable at the western borders last week.?

Particularly, the bid prices of Ukrainian corn for delivery in July-August stayed at 220-235 USD/t DAP Poland, and 215-230 USD/t DAP Hungary.?

The bid prices increased by average 10 USD/t to 250-265 USD/t DAP Slovakia.

In Australia, indicative delivered prices in Australian dollars per tonne this week were:

Barley Downs: $460 unchanged from June 16;

SFW wheat Downs: $470, unchenged from June 16;

Sorghum Downs: $385, down $5 from June 16;

Barley Melbourne: $430, down $25 from June 16;

ASW wheat Melbourne: $465 down $15 from June 16.

SFW wheat Melbourne: $460 down $15 from June 16.

(AUD/USD=> US$0.6944 vs. US$0.6935 past week).

Other news

In Europe, hot weather in France this week spurred French wheat farmers to start harvest early, reported FranceAgriMer.?

Following a warm, dry spring and hot weather this week, the crop is ripening early.?

The French farm agency said the soft (non-durum) and durum wheat harvest started earlier than last year and the five-year average.

Meantime, according to senior agriculture ministry officials, Bulgaria will produce between 6.5 and 6.7 MMT of wheat in 2022/23.?

Last year Bulgaria, one of the largest wheat exporters in the European Union (E.U.), produced 7.1 MMT.?

The senior official said domestic consumption is around 1.5 MMT, with the rest exported.

From North Africa, ADMIS said Morocco's wheat yield would be 67% lower year-over-year as drought has withered the crop.?

The EU Monitoring Agricultural Resources Unit (MARS) said yield would fall to 0.87 metric tons (MT) per hectare, 56% below the USDA's fiveyear average of 1.96 MT per hectare.?

Neighboring Tunisia is expected to have yields that are 8.7% higher than average, while Algeria will have yields 17% below average, said ADMIS.?

The latest USDA Supply and Demand Report puts North African wheat imports at 29.2 MMT, 6% higher than 2021/22.

From the Middle Kingdom, China’s national grain trade center announced yesterday it will auction 500.000 t of its imported soybean reserves on July 1.?

The country has offered a flurry of similarly sized sales throughout 2022 in an effort to boost supplies and tamp down high prices.

A Chinese housing developer this week advertised a scheme to "swap wheat for a house."?

The offer says interested buyers can put down 160,000 yuan ($23,900.22) worth of wheat.?

Housing in the area sells for between 600,000 and 900,000 yuan.?

A different developer allegedly advertised using garlic as a down payment on 30 transactions.

From South East Asia, officials in Bangladesh said they would hold government-to-government meetings with Russia to secure wheat supplies.?

The South Asian country imports around 7.0 MMT of wheat annually.?

Last year more than two-thirds were purchased from India.?

Bangladesh faces a 15% price increase since India's abrupt cutoff of wheat exports.

IGC JUNE UPDATES

The International Grains Council (IGC) on Thursday raised its forecast for 2022/23 global corn output, largely driven by an improved outlook for production in Ukraine.

In its monthly update, the inter-governmental body increased its 2022/23 world corn (maize) crop outlook by six million tonnes to 1.190 billion tonnes.

Ukraine's corn crop was seen at 25.1 million tonnes, up from a previous projection of 18.6 million - but still sharply below the 42.1 million in the prior season.

The IGC said corn acreage in Ukraine had exceeded initial expectations.

Global corn consumption in 2022/23 was seen at 1.204 billion leading to a drawdown in stocks by the end of the season to 271 million, down from 285 million a year earlier.

The IGC also maintained its forecast for global wheat production in the 2022/23 season at 769 million tonnes.

Ukraine's wheat crop in 2022/23 was still seen at 19.4 million tones, down from 33.0 million a year earlier.

Watching next week's market, the week starts with cattle traders will react to Friday’s Cattle on Feed report and grain traders reacting to surprise futures positions arising out of the Friday expiration “pins” for July options.??

On Monday, USDA will release the weekly Export Inspections report in the afternoon and the Crop Progress report overnight after the sessions close.?

On Wednesday, EIA will release their weekly ethanol production and stocks report.?

NASS will also put out the quarterly Hogs & Pigs report that afternoon.?

On Thursday, traders will start an active day reacting to the weekly Export Sales report.?

Later that evening, NASS will release the quarterly Grain Stocks and the annual June Planted acreage reports.?

Planted acreage report and quarterly Grain Stocks updates, is one of the agency’s most highly anticipated reports of the entire year.?

Traditionally the price reaction on this report day can be dramatic; potentially leaving prices nearly limit up or limit down depending on the information received.

Thursday is also first notice day for July grain options and last trade day for June live cattle.?

Finally on Friday, USDA will release the monthly consumption reports via the Grain Crushing, Fats & Oils, and Cotton Systems reports.

That's all, thank you.

To all of you, I wish you a good weekend and ...

Good Harvest 2022!

?

Author: Sandro F. Puglisi??

?To read more, check for free
www.bancadelgrano.it
Mansur Chowdhury

Trading Specialist at Sher Worldwide Trading & Consultancy (SWTC)

1 年

Is that Sicilian wheat ? WA: +8801791791172

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