Corn retreated on profit-taking after hit one-year high; Soybeans set back from a multi-month high, as forecast calls for rains in Argentina; Wheat ended lightly mixed with Chicago eking out modest gains ...
Good afternoon, Farmer Family ...
US farm markets were lightly mixed on Tuesday.
Corn prices dropped 0.42%.
Soybeans stumbled 0.52% lower.
The rest of the soy complex was mixed as soymeal slid 0.65%, while soyoil tracked 0.5% higher.
Wheat prices ended lightly mixed as Chicago SRW picked up 0.23%, while Kansas City HRW eased 0.04%, and Minneapolis spring wheat fell 0.67%.
- Corn retreated after reaching one-year high.
- Soybeans also set back from a multi-month top.
- The cash sales and speculative profit-taking weighed both on corn and soybean markets.
- Also, some forecasts called for light weekend rains in crop areas of Argentina, easing concerns for the future crops.
- Supporting soybeans, the USDA reported another private export sale of 198,000 MT of beans to China for 2024/25 shipment.
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- Wheat, meanwhile, posted a mixed action, with hard red contracts the weakest and soft market the strongest.
- Portions of the Western Plains have very little snow cover, with little precip in the forecast and a cold front coming in this weekend.
- A setback in the dollar also lent some support, making U.S. grains more competitive globally.
- However, the greenback remains near two-year highs.
- Also, cold temperatures are expected for the U.S. Plains over the next week, but winterkill risks are limited, according to Commodity Weather Group.
- Corn basis bids were steady to soft after dropping 1 to 5 cents across five Midwestern locations.
- Soybean basis bids were mostly steady to soft after dropping 2 to 5 cents across four Midwestern locations. An Illinois processor bucked the overall trend after tracking 5 cents higher.
- Basis bids for hard red winter wheat were flat to down in a spot check of locations in the U.S. Plains, as futures firmed slightly and farmer sales were steady.
- Protein premiums for HRW wheat shipped by rail to or through Kansas City fell by 10 cents for wheat with 11% protein.
- They were unchanged for wheat with all other protein grades.
- For 4 consecutive sessions, funds have been buying CBOT wheat, corn and soybeans contract, providing support to prices, partly absorbing the farmer selling pressure.
- Speculators indeed were again net buyers of corn and soy, albeit at a much smaller scale than on Friday or Monday.
- Funds have a hefty net long position in CBOT corn, leaving the market vulnerable to long liquidation, but are net short in soybeans.
- Funds, also hold a net short position in CBOT wheat futures, leaving the market vulnerable to short-covering rallies.
Corn and soybeans rose, but were stuck a little below multi-month highs as U.S. farmers stepped up their selling, sucking the momentum out of a price rally. Expectations that rain could aid Argentine crops stressed by a heat wave also dragged on prices. Wheat prices fell slightly amid weak demand and ample availability in export markets.
- Notably, the most active corn contract on the Chicago Board of Trade (CBOT) was up 0.3%, at 0520 GMT, soybeans rose 0.2%, while wheat dipped 0.4%.
- Weekly EIA data will be out later in the session, with most expecting to see ethanol production steady to lower, with a recent buildup in stocks specifically in the Midwest region.
- Ahead of monthly U.S. soy processing data due later in the session, NOPA crush for December is expected to show 205.498 mbu of soybean crushed, which would be 6.4% larger than November and 5.2% larger than last year.
South America
Brazilian crop agency Conab on Tuesday raised its forecast for domestic soy production in the 2024/2025 season to 166.32 million metric tons, from 166.21 tons previously, citing good weather and a minor adjustment in the growth of the oilseed's planted area.
- The new forecast for soy production in Brazil is 12.6% higher than the 2023/24 harvest and a record, if realized.
- However, it is lower than some private consultancies' estimates, which see the crop at between 167 million tons and 173 million tons.
- This season, Conab sees the soy cultivated area at 47.4 million hectares, an increase of 2.7% compared to the previous period.
- In December, Brazil's soy area growth was pegged at 2.6%.
- On the exports side, Brazil is poised to export more than 105 million tons of soybeans in the season, Conab said.
- For corn, Conab slightly lowered its total corn production forecast to 119.55 million metric tons.
- Conab said the second corn crop would be planted slightly later than desired because of delays in the soy cycle.
- As a result, second corn planting was expected to begin at the end of December, mainly in irrigated areas in Mato Grosso and Parana state.
- In other regions, it should gather pace at the end of January and intensify throughout February, Conab noted.
- A later planting schedule for second corn exposes the crop to bigger climate risk.
- Meantime, ANEC estimates that Brazil will export 2.98 MMT of corn in January, up 0.8 MMT from the previous forecast.
- January soybean exports out of Brazil are expected to total 2.19 MMT according to ANEC, a 0.48 MMT increase from their prior estimate.
- ANEC also anticipates Brazilian soymeal exports will reach 1.80 million metric tons this month.
Europe
European grain markets ended in the red.
- Benchmark March milling wheat on the Paris-based Euronext was down 1.18% at 231.25 euros ($238.35), moving away from a one-week high of 235.50 euros touched on Monday.
- MATIF Mar corn contract ended down €0.5/t to €215.75/t, while Feb rapeseed was down €4/t to €537.25/t.
- Wheat prices fell, as a rally in U.S. grains lost momentum and a bounce in the euro against the dollar underscored a weak export outlook in Europe.
- EU soft wheat exports so far in 2024/25 are down 35% year on year, weekly official data showed, with Morocco the second-largest destination behind Nigeria.
- Notably, EU soft wheat exports have reached 11.49 MMT through January 12.
- EU barley exports are also facing a moderate year-over-year decrease, with 2.26 MMT over the same period.
- The EU is facing competition from cheap Argentine wheat, with the 11.5% wheat crop offered at $230-$231 FOB.
- Russian 11.5% wheat was offered at $233-$234, while Russian 12.5% protein wheat for January/February shipment was quoted around $238-$240 a ton free on board (FOB).
- Romanian 12.5% wheat was at $240-$242.
- As a result, strong export competition hung over the market, with a lull in international demand adding to pessimism about European Union exports.
- On the imports side, EU corn imports are trending 5% above last year’s pace so far after reaching 10.58 MMT through January 12.
- EU soybean imports are trending 14% above last year’s pace after reaching 7.38 MMT through January 12.
- EU soymeal imports have jumped 31% higher year-over-year, with 10.61 million metric tons over the same period.
- EU rapeseed imports in the same period totalled 3.28 million tons, up 4% year on year.
- EU palm oil imports were at 1.55 million tons, down 19% from a year earlier.
- Rapeseed, meantime, was penalised by the correction in palm oil, canola and crude oil.
North Africa
Egypt is aiming to bring strategic wheat reserves to six months through contracting for large quantities in the near future, Hossam El-Grahy, Deputy Chairman of the General Authority for Supply and Commodities (GASC), said.
- Future of Egypt for Sustainable Development Authority delivered about 900,000 tons of wheat to the GASC within a month, according to El-Grahy.
- He said the received quantities raised the country's wheat reserves to 3.8 months.
- In 2024, Egypt's wheat imports jumped to their highest level in 10 years, reaching 14.2 million tons, compared to 10.8 million tons in 2023.
Ukraine
The Ukrainian market of fodder corn from the beginning of January continued a gradual increase in prices.
- Notably, prices for feed corn increased by 100-200 UAH/t and were mainly fixed in the range of 8500-9600 UAH/t CPT.
- Ditto, for the feed barley sector, which remained characterized by an upward dynamics.
- Processors most often, indeed, fixed demand prices for feed barley in the range of 7900-9300 UAH/t CPT, which was higher than in early January by 100-200 UAH/t.
- Prices were supported by the shortage of grain offers in the market due to restrained sales by agrarians.
- Also, active demand of both domestic buyers and traders, along with the export demand, supported prices.
Russia
In the period from January 1 to 10, the Russian Federation exported 480 thousand tonnes of major grain crops, per latest data from the Russian Grain Union.
- That is three times lower than in the same period a year earlier when exported 1.476 mln tonnes.
- Notably, wheat shipments since the beginning of the year have decreased by almost 57%, to 468,000 tonnes, barley - by 93%, to 10,400 tonnes, while corn, for now is stopped.
- "In the first decade, Russian wheat was shipped only to seven countries, while a year ago there were 18", Elena Tyurina, director of the analytical department of the RGU said.
- The maximum volume was shipped to Kenya - 111 thousand tonnes, which is 6% more than a year ago.
- Conversely, exports to Egypt decreased by 54% to 83 thousand tonnes, while only 4.8 thousand tonnes were shipped to Turkey.
- E. Tyurina also specified "the largest part of grain (197 thousand tonnes) was shipped through Novorossiysk.
- That is 67% more than a year earlier.
- 113 thousand tonnes were shipped through the port of Vysotsk, a new port, that a year ago haven't transshipment.
- Also, road transshipment of Russian grain at the beginning of the year decreased by almost 65%.
- Through Rostov-on-Don shipments fell by 69%, while through Azov - by 84%.
- At the same time, shipments via Yeisk increased by 31%.
Southeast Asia
Malaysian palm oil prices closed lower, after two sessions of sharp gains.
- Notably, the benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 1.27% by the close.
- Cargo surveyors estimated Malaysian palm oil exports to have fallen between 21.4% and 26.8% during the Jan. 1-10 period from a month earlier.
- India’s palm oil imports in December plunged 41% from a month earlier to a nine-month low.
- The Malaysian ringgit rose 0.18% against the US dollar, making the commodity a tad expensive for buyers holding foreign currencies.
- Losses, however, were limited as Malaysia’s palm oil stocks declined for a third straight month in December 2024, falling 6.91% to 1.71 million metric tons, while crude palm oil production fell 8.3%, data from the Malaysian Palm Oil Board showed.
- Also, Dalian’s most active soyoil contract rose 1.2% and its palm oil contract added 0.14%.
Australia
Australian cereals are the cheapest origin grain into all Asian destinations and most of the Middle East, so far this season.
- These competitive prices, are supported by the weakness in AUD.
- However, the next 4-6 weeks will be telling as to whether these prices, will translate into more export business.
- The current wheat export pace is seeing 360kt due to be exported from SA in January out of a 1.9 million tonnes (Mt) export program, and 14 percent of Victoria’s 2024/25 2.5Mt program.
- Meantime, WA wheat bids enjoyed some modest gains, up $2 to be bid around $376, with 2025/26 APW MG pricing around $397 yesterday.
- Eastern Australian cereal bids were largely unchanged, with wheat around $345 and barley $310.
- For canola, in the west, canola bids were off slightly yesterday, bid $880 FIS.
- In the east, canola bids were slightly higher at around $822.
International grain and oilseed tenders & trade
- 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 CHS at an estimated $267.60 a ton cost and freight (c&f) for shipment in the second half of March. Offers from some other trading houses participating in the tender, were: Cargill $275.50, Viterra $286, Al Dahra $276, Aston $280, Buildcom $273.27, Olam $275.50, Ameropa $269.94 and Cereal Crops $300.
- Jordan will issue a new tender in the coming days to buy 120,000 tons of wheat, with offers expected to be submitted on Jan. 21, while shipment in the full month of April and full month of May.
- A separate tender from Jordan seeking 120,000 tons of animal feed barley closes this morning.
- Japan has issued a tender for 132,888 MT of wheat for import from the US, Canada, and Australia, with 48,308 MT US specific.
Outside markets ...
Oil prices slipped, though declines were limited by new U.S. sanctions on Russian oil exports to India and China.
- On Monday, prices jumped 2%, after the U.S. Treasury Department imposed sanctions on Gazprom Neft and Surgutneftegas as well as 183 vessels that transport oil as part of Russia's so-called shadow fleet of tankers.
- However, Brent futures fell 1.35% yesterday, while U.S. West Texas Intermediate (WTI) crude finished 1.67% lower.
- The U.S. Energy Information Administration said the country's oil demand would remain steady at 20.5 million barrels per day (bpd) in 2025 and 2026.
- Also, US domestic oil output will rise to 13.55 million bpd, compared with the agency's previous forecast of 13.52 million bpd for this year.
- On the world side, the EIA trimmed its outlook for global demand in 2025 to 104.1 million barrels per day, while expecting supply of oil and liquid fuel to average 104.4 million bpd.
- It also predicted Brent prices would fall 8% to average $74 a barrel in 2025, then fall further to $66 a barrel in 2026, while WTI would average $70 in 2025 and fall to $62 next year.
- Meantime, uncertainty about demand from China could blunt the impact of the tighter supply.
- China's crude oil imports fell in 2024 for the first time in two decades.
This morning, oil prices rose, trimming losses from the previous day, as the focus turned back to potential supply disruptions from sanctions on Russian tankers, though gains were capped as the market awaited more clarity on their impact.
- Notably, Brent crude futures edged up 0.6%, by 0735 GMT, while U.S. West Texas Intermediate crude climbed 0.8%.
- The market also found some support this morning after the American Petroleum Institute late on Tuesday reported U.S. crude stockpiles dropped by 2.6 million barrels in the week ended Jan. 10.
- However, they added that gasoline inventories rose by 5.4 million barrels while distillate stocks climbed by 4.88 million barrels.
The Baltic Exchange's main sea freight index fell, retreating from a more-than-one-month high reached on Monday.
- Notably, the main index dropped 13 points to 1080.
- The capesize index declined by 11 points to 1604.
- The panamax index fell 20 points to 906, marking its lowest level since July 25, 2023.
- Meanwhile, the supramax index dipped 11 points to 798, extending its losing streak to 23 sessions.
- Separately, supertanker freight rates surged as US sanctions on Russia's oil industry expanded, prompting traders to secure vessels to transport supplies from alternative sources to China and India.
U.S. stock indexes settled mixed.
- The Dow Jones Industrial Average added 0.5%, the S&P 500 rose 0.1%, while the Nasdaq composite slipped 0.2%.
- The overall market garnered support after Bloomberg reported President-elect Trump’s economic team is considering a gradual ramp-up in trade tariffs in a strategy to avert a spike in inflation.
- Also, the US Dec PPI final demand rose +0.2% m/m and +3.3% y/y.
- Dec PPI ex-food and energy was unchanged m/m and rose +3.5% y/y.
- Those data reduced inflation concerns and boosted expectations for a friendly US CPI report on Wednesday.
- Meantime, the two-year Treasury yield eased to 4.36% from 4.39%.
- The 10-year T-note yield fell -0.2 bp to 4.788%.
- However, stock indexes fell back from their best levels and turned mixed on some negative corporate news.
- Eli Lilly tumbled more than -6%, Meta Platforms fell more than -2%, Nvidia fell 1.1%.
- Weakness in megacap technology stocks weighed on the broader market.
- In Europe, the Euro Stoxx 50 closed up +0.53%.
- China’s Shanghai Composite Index closed up +2.54%.
- Japan’s Nikkei Stock 225 fell to a 6-week low and closed down -1.83%.
- The Japan Dec eco watchers outlook survey unexpectedly fell -0.6 to 48.8.
This morning, Asian stocks were mixed.
- Tokyo’s Nikkei 225 index edged 0.1% lower, the Kospi ended the day flat, the Hang Seng in Hong Kong added 0.3%, the Shanghai Composite shed 0.4%, Australia’s S&P/ASX 200 lost 0.2%.
- South Korea's unemployment rate reached 3.7% in Dec on a seasonally adjusted basis, amid political uncertainty, the government reported.
- That was the highest since June 2021.
- South Korean law enforcement officials detained impeached President Yoon Suk Yeol on Wednesday in connection with his failed declaration of martial law last month.
- Shares related to Xiaohongshu surged after it topped the Apple App Store chart in the United States, as U.S. TikTok users flock to the app amid the looming threat of a TikTok ban.
- Companies like Foshan Yowant Technology, a digital marketing firm, and Inly Media Co., an advertising company, both saw their shares rise by around 10%.
- Bloomberg reported that President-elect Trump’s incoming economic team is considering graduated tariff hikes of about 2% to 5% a month rather than aggressive one-time increases to avert inflation spikes.
- Also, weaker-than-expected US Dec PPI report, weighed on the dollar.
- Meantime stocks rallied, curbing liquidity demand for the dollar.
- The euro posted moderate gains against the dollar.
- Hawkish comments from ECB Governing Council member Holzmann supported the euro.
- The euro also found support from higher European government bond yields, with the 10-year German bund yield Tuesday climbing to a 7-month high.
- On the other hand, the USD/JPY rose.
- BOJ Deputy Governor Himino did not indicate that the BOJ would raise interest rates at next week’s policy meeting.
- Also, weaker-than-expected Japanese economic news on the Dec eco watchers outlook survey weighed on the yen.
- Losses in the yen, however, were limited as the Nikkei Stock Index tumbled to a 6-week low.
- Also, a jump in the Japan 10-year JGB government bond yield to a 13-year high strengthened the yen’s interest rate differentials.
This morning, the U.S. dollar fell to 157.23 Japanese yen from 158.00 yen. The euro slipped to $1.0294 from $1.0309.
Settlement Prices for Key Commodity, Index & Currencies
- Chicago wheat Mar contract was up 1.2c/bu to 546.2c/bu;
- Kansas wheat Mar contract was down 0.2c/bu to 560.6c/bu;
- Minneapolis wheat Mar contract was down 4c/bu to 589.4c/bu;
- MATIF wheat Mar was down €2.75/t to €231.25/t;
- ASX wheat Mar contract was up A$3/t to A$329/t;
- US DWI Cash (durum wheat index) was up 0.18c/bu to 648.75c/bu;
- 1CWAD (Canadian durum) avg spot price was up C$1.81 /t to C$322.92/t.
- EDW (EU durum) Mar contract was unchanged to €316.5/t;
- Chicago corn Mar contract was down 2/bu to 474.4c/bu;
- MATIF corn Mar was down €0.5/t to €215.75/t;
- Chicago soybeans Mar was down 5.4c/bu to 1,047.4c/bu;
- Winnipeg canola Mar contract was down C$6.1/t to C$641.6/t;
- MATIF rapeseed Feb was down €4/t to €537.25/t;
- Brent crude Mar was down US$1.09/barrel to $79.92;
- WTI crude Feb was down US$1.32/barrel to $77.50;
- BADI (Baltic Dry Index) was down 13 points to 1,080;
- Dow Jones was up 221,16 points to 42.518,28;
- S&P 500 was up 6,69 points to 5.842,91;
- NASDAQ Composite was down 43,71 points to 19.044,39;
- US dollar index (Mar '25) was down 0.702 points to 109.110;
- AUD/USD firmer at US$0.6194;
- USD/CAD weaker at $1.4350;
- EUR/USD firmer at $1.0307;
- USD/RUB firmer at ?102.6800.
Author: Sandro F. Puglisi
Source: Me, AAFC, ABARES, Abiove, AHDB, Amis, Argus Media, Baltic Exchange, Buenos Aires Grain Exchange, CFTC, CGC, China AgMin, Clear Grain Exchange, CME, Conab, Copernicus, CWG, ECB, ECMWF, EIA, Euronext, European Commission, Eurostat, FAO, FCI, FED, GASC, GIWA, ICE, IEA, IGC, IKAR, JRC MARS Bulletin, LSEG, MPOB, National Bureau of Statistics of China, ODC, OIAC, RBA, Reuters, Rosario Grain Exchange, Russia AgMin, Russian Grain Union, S&P Global, SovEcon, StatCan, USDA, UA AgMin, and Others ...
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