Grain markets mostly firm, on Thursday ...
Good afternoon, Farmer Family ...
US farm markets were mostly firm, on Thursday.
The rest of the soy complex was mixed as soymeal eased 0.16%, while soyoil climbed 1.4%.
Wheat prices closed out the session mixed with the hard wheats falling lower, while Chicago SRW prices were steady at the close. Notably, Chicago SRW ended unchanged, while Kansas City HRW fell 0.7%, and Minneapolis spring wheat sliding 0.33%.
- Corn resumed a rally, with prices hitting the highest level in more than 14 months, on concerns over dryness in Argentina and tighter U.S. stocks.
- Rainy weather in parts of Brazil that is delaying the soy harvest and planting of the country's second corn crop is also boosting prices.
- Brooke Rollins has been confirmed as USDA Secretary and, in spite she had ties to groups that were vehemently against ethanol production, yesterday she promised to “elevate and honor all sources of fuel” and called biofuels an important component of Trump’s “energy dominance plan.
- Capping gains, weekly EIA production totaled 1.099 million bpd in the week ending on 1/17.
- That was down 4,000 barrels per day on the week.
- Ethanol stocks were larger than anticipated at 25.874 million barrels, up another 866,000 barrels from the week prior.
- Exports were up 44,000 barrels per day at 169,000 bpd.
- Soybeans rose, hovering near a six-month peak on weather prospects for South American crops.
- However, concerns about overly dry weather trimming the Argentine soy crop may be counterbalanced by expectations of a record Brazilian soy crop.
- China has stopped receiving Brazilian soybean shipments from five firms after cargoes did not meet plant health requirements, Brazil's government said on Wednesday.
- Wheat ended mixed, with Chicago ending the session unchanged, amid a lack of fresh news.
- Worries about freeze damage to the dormant winter wheat crop in portions of the U.S. wheat belt, supported the market, after early in the week, frigid temperatures had threatened to damage crops.
- Also, wheat prices have gained strength from stronger corn and soybean markets.
- However, temperatures are moderated across the Plains and should remain above levels that can harm wheat over the next 10 days, weather firm Maxar said.
- Meanwhile the hard wheats faded lower.
- Also, market players are waiting to see whether U.S. President Donald Trump imposes tariffs on goods from major trading partners that could spark retaliation, hurting U.S. farm exports.
- Operators also were awaiting for the release of the weekly U.S. grain and soy export sales data from USDA delayed on Friday.
- Corn basis bids were steady to mixed after trending as much as 2 cents higher at a Nebraska processor and as much as 4 cents lower at an Illinois processor.
- Soybean basis bids were steady to weak after tracking 2 to 10 cents lower across four Midwestern locations.
- Basis bids for hard red winter (HRW) wheat in the southern U.S. Plains stayed mostly flat, as some grain dealers shrugged off concerns over risks to crops from cold weather.
- A grain elevator in Catoosa, Oklahoma, raised its basis by 5 cents per bushel.
Soybeans, corn and wheat fell, though contracts looked set to extend their run of weekly gains.
- Notably, the most-active corn contract on the Chicago Board of Trade (CBOT) was down 0.61%, by 0441 GMT.
- For the week, it was up 0.47% in its third consecutive climb.
- Soybeans fell 0.96%, but were headed for a 2% weekly gain, in what would be its fifth straight weekly rise.
- Wheat fell 0.68%, but has gained 2.1% this week, heading for its third consecutive climb.
South America
The Brazilian ag ministry confirmed issues with pesticide and insects in the recently rejected soybean cargos, but insists that the problem is limited to 5 firms and will not materially impact exports to China overall.
- The 2024/2025 soybean crop is expected to reach a record 170.7 million tons, hEDGEpoint Global Markets said.
Argentina will lower taxes on its grains exports Monday onwards and until June, delivering on a campaign promise from libertarian President Javier Milei.
- In a boost to Argentina’s competitiveness in the global market, taxes on soy exports will fall to 26% from 33%, tax rates on derivatives of the oilseed will fall to 24.5% from 31%, and for both wheat and corn they will go to 9.5% from 12%.
- The tax cuts will encourage farmers, who have been grappling with a drought and low crop prices, to release their soy and corn stocks.
- Hot weather and insufficient rainfall in recent weeks have damaged crop growth.
- On this wake, the Buenos Aires Grains Exchange cut yields for Argentina’s 2024/25 soybean and corn crops by 1 million metric tons each to 49.6 million tons and 49 million tons, respectively.
Europe
European grain markets rose.
- Benchmark March milling wheat on the Paris-based Euronext was 0.1% up at 230.25 euros ($240.06) per metric ton.
- MATIF Mar corn was up €1.5/t to €216/t, while Feb rapeseed was up €0.5/t to €526.25/t.
- Wheat was little changed, as corn-led strength in Chicago grains helped counter pressure from a bleak export outlook in western Europe.
- Black Sea origins are very competitive in thin international demand, and hung over the market.
- Romanian 11.5% protein wheat for February shipment was offered on Thursday at around $235-$237 FOB.
- Argentine 11.5% protein wheat was offered at around $225-$228 FOB.
- Meantime, German and other Baltic region export prices for 12.5% protein wheat, and February shipment, were at around $248-$258 a ton free on board (FOB).
- Baltic prices are generally at a discount to Euronext.
- 7,000 tons of Swedish 11.5% wheat for January delivery to Swedish west coast ports were sold at 5 euros under Paris March futures.
- But with this export competition so strong, German and Baltic trading is concentrating on the internal EU market, with some decent internal demand, including for feed wheat.
- Ditto, for the French wheat export activity, which remained sparse.
- Inland wheat prices in France were more attractive than at ports as domestic processors sought to secure supplies after last year's poor harvest.
- The corn market, meantime, benefited from the firmness of its American counterpart to return to test at the close the strong resistance of 216 €/t on the March 2025 deadline.
- Rapeseed, for its part, maintained its support of €525/t in May 2025 deadline, thanks to its end-of-day rebound, in the wake of canola prices.
- Traders, meantime, were awaiting further indications on plans by U.S. President Donald Trump for tariffs against trading partners including the European Union.
Ukraine
According to operational data of the State Customs Service, as of January 22, Ukraine has exported 24.471 mln tonnes of grain and leguminous crops since the beginning of the 2024/25 MY, of which 2.239 mln tonnes have been shipped since the beginning of the current month.
- In particular, since the beginning of the current season the country have exported wheat for 10.428 mln tonnes; barley for 2.028 mln tonnes; corn for 11.598 mln tonnes.
- Total exports of Ukrainian flour since the beginning of the season as of January 22 were estimated at 41.1 thousand tonnes, including wheat flour at 37.7 thousand tonnes.
- In this context, since the beginning of the current week, prices for feed barley have continued to rise on the Ukrainian export market.
- Notably, in the ports of Greater Odessa and Danube, demand prices for feed barley increased by 2-4 USD/t and as of January 23, 2025 are reported in the range of 198-209 and 200-210 USD/t CPT-port, Odessa and Danube, respectively, compared to the end of last week.
- Stable demand of importers, limited number of offers from agricultural producers, as well as similar situation on the adjacent markets of corn and feed wheat contributed to the upward price dynamics.
Russia
As of January 1, Russian agricultural enterprises had just under 26.3 million tons of grain and leguminous crops in stock, data from Rosstat showed.
- That is 25% less than on the same date a year earlier.
- In particular, as of the reporting date, wheat stocks in these formations decreased by 29% compared to the beginning of last year - to 15.4 million tons.
- Corn was 8% lower, to 3.4 million tons.
- Sunflower stocks by the beginning of this month also significantly decreased compared to last year - by 23%, to 2.1 million tons.
- However, the reduction in the total stocks of oilseeds, as of the beginning of 2025 was less significant - by 5%, to 5.2 million tons.
Southeast Asia
Malaysian palm oil price closed lower for a second straight session, dragged down by weakness in rival vegetable oils.
- Notably, the benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange lost 0.4% by the close.
- A selloff in Chicago soyoil and in South American crude degummed soybean oil FOB markets Wednesday overnight and in Chinese veg oil futures in Asian hours Thursday.
- China has stopped receiving Brazilian soybean shipments from five firms after cargoes did not meet plant health requirements.
- That triggered a wave of selling in the soy complex.
- On this wake, Dalian’s most-active soyoil contract was down 1.29%, while its palm oil contract slipped 2.25%.
- Making an additional pressure, exports of Malaysian palm oil products for Jan. 1-20 were estimated to have fallen between 18.2% and 23%, according to cargo surveyors.
Australia
Volume traded in the feedgrain market has been thin, despite bids creeping up to draw out tonnage and cover a limited number of short positions.
- In the north, sorghum currently appears on Queensland stems no earlier than May, but traders feel April, and possibly last-half March, shipments may be possible now that harvest of the red grain is off to a strong and early start.
- In the south, growers have relied on canola, lentils, milling wheat, and malting barley to generate the cash they need post harvest.
- It means volume traded in ASW-type wheat and feed barley is thin, although the relative affordability of feed barley in the global market may inspire some near-term accumulation for export.
- On the weather side, the 3-month long-range BOM forecast from Feb-Apr is indicating above median rainfall for most Qld, NSW, Vic and SA.
- Welcome news for growers if it means a ‘normal’ break, particularly for Vic and SA.
- Meantime, Western Australian canola bids were slightly higher yesterday, at around $850 FIS.
- In the east canola bids were off between $6-$20 to around $788.
- WA wheat bids were lower around $369 with barley still well bid around $340.
- In the east, wheat was unchanged at $345, and barley was firmer with track bids between $300-$323.
- SA and Western Vic saw feed barley trading around $330 delivered, meantime.
International grain and oilseed tenders & trade
- Algerian state agency ONAB is believed to have bought about 25,000 to 35,000 metric tons of soymeal in an international tender for up to 70,000 tons on Thursday. It was expected to be sourced from Argentina with shipment by Feb. 25 at the latest. Prices were not revealed. No significant purchases were initially reported of up to 240,000 tons of feed corn also sought in the tender, although some deals could not be ruled out. The corn was sought sourced from Argentina or Brazil only in up to six consignments of 30,000 to 40,000 tons, with shipment by Feb. 20 at the latest.
- Iranian state-owned animal feed importer SLAL is believed to have purchased animal feed barley in an international tender seeking around 120,000 metric tons this week. The volume of barley bought was unclear with estimates ranging between 100,000 and 250,000 tons. No purchases have been reported about up to 120,000 tons of feed corn and 60,000 tons of soymeal also sought in the tenders. Shipment for all the grains was sought in March and April. The barley was sought sourced optionally from the European Union, Russia, Ukraine or elsewhere from the Black Sea region including Turkey and Kazakhstan.
Outside markets ...
- Notably, Brent crude futures settled 0.9% lower, while U.S. West Texas Intermediate crude (WTI) settled down 1.09%.
- U.S. President Donald Trump urged Saudi Arabia and OPEC to bring down its cost of oil during his address at the World Economic Forum.
- Uncertainty over how Trump's proposed tariffs and energy policies would affect global economic growth and energy demand also weighed on prices.
- Limiting losses, U.S. crude oil stockpiles slipped to their lowest level since March 2022 last week EIA data showed.
- Notably, the EIA report, issued a day late because of a U.S. holiday on Monday, said crude stockpiles fell by 1 million barrels to 411.7 million barrels in the week to Jan. 17, a ninth consecutive weekly decline.
- However, the drawdown was smaller than expected.
- Distillate inventories also declined, while gasoline inventories rose, the EIA said.
This morning, oil prices were little changed, but headed for a weekly decline.
- Notably, Brent crude futures were up 6 cents at $78.35 a barrel at 0745 GMT, while U.S. West Texas Intermediate crude (WTI) was 4 cents higher at $74.66.
- For the week, Brent was down 3.07% so far, and WTI down 4.17%.
The Baltic Exchange's main sea freight index extended losses to a 23-month low, dragged by weaker rates across all vessel segments.
- Notably, the main index dropped 69 points to 824 points, hitting its lowest since February 2023.
- The capesize index slipped 155 points to 1,081 points, dropping to over five-week low.
- The panamax index fell 39 points to 804 points, hitting its lowest since June 2020.
- The supramax index was down 20 points at 654 points, lowest since February 2023.
U.S. stock indexes settled higher.
- The Dow Jones Industrial Average piled on 0.9%, the S&P 500 climbed 0.5%, while the Nasdaq composite added 0.2%.
- The S&P 500 posted a new all-time high, and the Dow Jones Industrials posting a 6-week high.
- Favorable corporate earnings results were supportive of the overall market.
- General Electric closed up more than +6%, and Union Pacific closed up more than +5%.
- However, weakness in chip stocks limited gains.
- Higher bond yields were negative for stocks, with the 10-year T-note yield up +2.7 bp to 4.638%.
- Also, Thursday's US economic news was negative for stocks.
- US weekly initial unemployment claims rose +6,000 to a 6-week high of 223,000.
- US weekly continuing claims rose +46,000 to a 3-year high of 1.899 million.
- The US Jan Kansas City Fed manufacturing sentiment survey was unchanged at -5.
- In Europe, the Euro Stoxx 50 closed up +0.22%.
- China's Shanghai Composite Index climbed to a 2-1/2 week high and closed up +0.51%.
- Japan's Nikkei Stock 225 rose to a 2-week high and closed up +0.79%.
- Japanese Dec exports rose +2.8% y/y, with Dec imports also rising +1.8% y/y.
This morning, Asian shares mostly advanced.
- Tokyo's Nikkei 225 index lost less than 0.1%, the Hang Seng in Hong Kong added 1.9%, the Shanghai Composite index rose 0.7%, South Korea Kospi gained 0.9%, and Australia’s S&P/ASX 200 advanced 0.4%.
- The Bank of Japan raised its benchmark rate to about 0.5% from 0.25%.
- It is the highest level for the rate since 2008.
- As a result, Toyota Motor Corp.'s shares fell 1.5%, Nissan Motor Corp. lost 2.5% and Honda Motor Co. was down 0.8%.
- A stronger yen tends to make profits weaker when overseas revenues are converted into yen.
- Just before the BOJ's decision, statistics from the government showed the core inflation rate increased to 3% year-on-year in December, reaching the highest level in 16 months and above the central bank’s 2% target.
The dollar index fell, as the dollar gave up early gains and turned lower after the S&P 500 rallied to a new record high, reducing liquidity demand for the dollar.
- The dollar initially moved higher as T-note yields rose.
- However, US weekly initial unemployment, showed a weaker labor market than expectations.
- Also, weekly continuing claims, showed a weaker labor market than expectations.
- The US Jan Kansas City Fed manufacturing sentiment survey eased vs expectations of an increase.
- Meantime, the EUR/USD rose, reversing early losses based on dovish comments from ECB Governing Council member Escriva, who said the ECB still has restrictive policy and needs to move toward a more neutral stance.
- On the other hand, the USD/JPY fell, with the yen recovering from a 1-week low.
- The yen initially moved lower after Japan’s Nikkei Stock Index rallied to a 2-week high, which curbed safe-haven demand for the yen.
- Then, posted moderate gains on a report from the Nikkei that said the BOJ will raise interest rates.
- Japanese trade news was mixed for the yen, as Dec exports rose more than expectations, while Dec imports were weaker than expectations.
This morning, the U.S. dollar dropped against the Japanese yen, trading at 156.42 yen, up from 156.06 yen. The euro rose to $1.0479 from $1.0416.
Settlement Prices for Key Commodity, Index & Currencies
- Chicago wheat Mar contract was unch to 554c/bu;
- Kansas wheat Mar contract was down 4c/bu to 570.6c/bu;
- Minneapolis wheat Mar contract was down 2c/bu to 604.4c/bu;
- MATIF wheat Mar was up €0.25/t to €230.25/t;
- ASX wheat Mar contract was up A$0.5/t to A$330/t;
- US DWI Cash (durum wheat index) was down 0.14c/bu to 651.94c/bu;
- 1CWAD (Canadian durum) avg spot price was not available. Available prices were NW SASK at C$310.71/t (-4.88C$/t), SW SASK at C$317.37/t (-1.47C$/t), and SE SASK at C$316.78/t (-4.22C$/t);
- EDW (EU durum) Mar contract was unchanged to €316.5/t;
- Chicago corn Mar contract was up 5.4/bu to 489.6c/bu;
- MATIF corn Mar was up €1.5/t to €216/t;
- Chicago soybeans Mar was up 9.4c/bu to 1,065.4c/bu;
- Winnipeg canola Mar contract was up C$7.3/t to C$637.4/t;
- MATIF rapeseed Feb was up €0.5/t to €526.25/t;
- Brent crude Mar was down US$0.71/barrel to $78.29;
- WTI crude Mar was down US$0.82/barrel to $74.62;
- BADI (Baltic Dry Index) was down 69 points to 824;
- Dow Jones was up 408,34 points to 44.565,07;
- S&P 500 was up 32.34 points to 6.118,71;
- NASDAQ Composite was up 44,34 points to 20.053,68;
- US dollar index (Mar '25) was down 0.099 points to 107.863;
- AUD/USD firmer at US$0.6284;
- USD/CAD firmer at $1.4385;
- EUR/USD firmer at $1.0415;
- USD/RUB firmer at ?99.8740.
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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