July 2, 2024 - Newswires

Wheat found double-digit gains on bargain buying; soybeans ended higher, on Chinese hopes. Corn edged down on beneficial weather ...

Please to note:

"While the 2024 harvest is advancing, depending on the activities keeping us busy in the field, the publication of this newsletter may vary or be cancelled. Therefore, we do not guarantee a daily release as usual. Thank you."

Good afternoon, Farmer Family ...

US farm markets ended mixed, but mostly higher on Monday.

Corn prices eased 0.12%.

Soybeans moved 1.1% higher.

The rest of the soy complex also was in the green as soymeal rose 0.87%, while soyoil climbed 4.45%.

Wheat prices made noticeable gains as Chicago SRW climbed 2.92%, Kansas City HRW rose 2.26%, and Minneapolis spring wheat added 3.14%.

• Corn edged down on beneficial weather forecast for the U.S. Midwest.
• Scattered rain missed some corn-growing areas in the central U.S. over the weekend, according to an analyst note, but the area can expect more moderate to heavy rainfall this week.

• Weekly Export Inspections data showed a slowdown in weekly corn shipments during the week of June 27 to 819,577 MT.
• That was a 28.91% drop from the week prior, although still 21.26% larger than the same week last year.
• Accumulated export shipments were at 42.48 MMT, which is a 28.09% increase from the year prior.
• Meantime, USDA’s Grains Crushing report showed 453.7 mbu of corn used for ethanol production during May.
• That was a 7.4% jump on the revised (5.5 mbu higher) April total and a 3.34% increase in the same month last year.
• That also takes the marketing year total to 4.068 bbu, or 74.6% of USDA’s full year forecast, on pace with the 8-year average.
• Soybean rose with some analysts saying China is likely to import record volumes of soybeans in July.
• China really has booked higher volumes in recent weeks, mainly drawn by lower prices.
• Also, according to some analysts the prospect of Donald Trump returning as president and reigniting trade tensions between Beijing and the U.S., may support the buying activity.
• Meantime, Weekly Export Inspections data showed only 303,023 MT of soybeans shipped during the week of June 27.
• That was a 13.4% drop from the week prior and still 14.7% above the same week last year.
• Year to date bean shipments are at 41.54 MMT, still 16% behind the same period in the 22/23 marketing year.
• USDA’s Fats & Oils report also showed May soybean crush at 191.97 mbu.
• That was below the 193.85 mbu average estimate, though it represent an 8.02% increase from April’s drop and a 2.67% jump from May 2023.
• Meantime, soy oil stocks came in at a total of 2.187 billion lbs, below the average estimate and 5.4% below the month prior.
• For wheat, prices rose as uncertainty over the size of Russia's fraught wheat crop spurred traders to cover their short positions while cheap prices enticed bargain buying.
• The U.S. harvest is nearing its end in many states, adding support to futures.
• An uptick in demand for U.S. wheat has also steadied the market.
• Per latest Weekly Export Inspections report, year to date inspections, nearly through the first month of the new marketing year, were at 1.36 MMT.
• That was 23.7% above the same month last year.
• However, the report showed only 309,775 MT of wheat shipped during the week that ended on June 27.
• That was a 9.87% decline from last week and 9.5% below the same week last year.

In this context ...

Spot basis bids for corn and soy were steady to higher.

• Spot basis bids for corn were steady to up at ethanol plants and steady to down at other processors.
• Notably, the corn basis increased by 3 cents per bushel and 5 cents at facilities in Morris, Illinois, and Blair, Nebraska, respectively.
• The corn basis also rose at an elevator in Council Bluffs, Iowa.
• The soybean basis increased at one river terminal in Toledo, Ohio.
• Spot basis bids for hard red winter (HRW) wheat were mixed.
• Meantime, protein premiums for HRW wheat shipped by rail to or through Kansas City rose by 12-1/2 cents per bushel for wheat with 12% to 12.8% protein content and were changed for other types.
• Commodities fund were net sellers of Chicago Board of Trade corn contracts and net buyers of soyoil, wheat, soymeal and soybeans contracts.

After the sessions close ...

The condition of the U.S. corn crop deteriorated in the latest week while national soybean ratings held steady after floods swamped portions of the northwestern Midwest, U.S. government data showed.

• Notably, the USDA rated 67% of the corn crop as good to excellent in its weekly crop progress report.
• That was down 2 percentage points from a week ago.
• NASS pegged the US corn crop at 11% silking, 5% ahead of the 5-year average pace.
• For soybeans, the USDA rated 67% of the crop as good to excellent, unchanged from last week.
• The report indicated 95% of the US bean crop emerged, with 20% blooming, 5% above the average pace.
• The crop already has 3% setting pods vs. the 2% average.
• For spring wheat, condition ratings improved, as the USDA rated 72% of the U.S. spring wheat crop as good to excellent, up from 71% last week.
• Spring wheat was 38% headed, 1% faster than normal.
• Meanwhile, the harvest of the U.S. winter wheat crop continued to progress, as the winter wheat harvest was 54% complete, up from 40% a week ago.
• Condition ratings were down 1% to 51% gd/ex, with this week being the final rating released.

This morning ...

Chicago corn prices gained more ground, as the U.S. crop condition declined due to adverse weather in parts of the Midwest. Wheat prices fell, while soybeans ticked higher.

• Notably, the most-active corn contract on the Chicago Board of Trade added 0.1%, as of 0322 GMT, wheat fell 0.4%, while soybeans climbed 0.2%.

Canada

Soil moisture good/excellent conditions in Alberta decreased 10% compared to last week due to recent heat and wind, but crop conditions still above 5-year average with 74% of crops rated good/excellent.

• Crop conditions rated good to excellent across the province, are 2 per cent above the 5-year average and have increased 2 per cent since last week.
• Conditions increased in the South Region to by 2 per cent to 74 per cent good to excellent, by 2 per cent to 79 per cent good to excellent in the Central Region, by 4 per cent to 80 per cent good to excellent in the Peace Region and by 8 per cent to 69 per cent good to excellent in the North West.
• Conditions decreased by 1 per cent to 69 per cent good to excellent in the North East Region.
• Provincially, major crops (spring wheat, barley and oats) are right on track with the provincial average at the early stages of stem elongation.
• Precipitation was variable over the week with the majority of it arriving in the form of thunderstorm activity.

Central America

Mexico's incoming government will discard a core goal of outgoing President Andres Manuel Lopez Obrador to reduce imports of yellow corn and achieve self-sufficiency in production of the grain, according to the incoming agriculture minister.

• Under the administration of Lopez Obrador, Sheinbaum's mentor, Mexico aimed to dramatically reduce imports of yellow corn, most often originating from the U.S., in favor of boosting local production.
• The government, however, failed to reduce about $6 billion in yellow corn imports annually during his tenure.
• According to some analysts, Mexico will likely have to continue importing large amounts of yellow corn, due to the increased demand in the livestock sector as Mexicans' appetite for meat products grows.

South America

Brazil

Dry weather means Brazilian farmers' second corn crop is expected to be 571,000 metric tons less than previously forecast, an updated StoneX forecast released on Monday showed.

• Notably StoneX reduced its estimate to 92.9 million tons.
• StoneX also cut Brazil's total corn crop projection for the 2023/24 cycle to 121.18 million tons.
• Yields in Mato Grosso do Sul, however, showed a positive adjustment, helping to shore up output there, StoneX said.
• AgRural estimated that 49% of the country’s second corn crop has been harvested as of June 27.
• That was up from 34% in the prior week and the fastest pace since AgRural began tracking this data more than a decade ago.
• Meantime, the USDA Foreign Agricultural Service post in Brasilia, revised down its 2023/24 soybean production estimates to 150 million metric tons (MMT).
• Amidst lower soybean output and solid gross crushing margins, the attaché also reduced export estimates to 94 MMT while increased crush volumes to 55.1 MMT.
• The attaché have also revised up to 45.8 million ha (hectares) Brazil's MY 2023/24 soybean area based on new geoprocessing data and satellite imagery.
• Similarly, for out-year, Post revised up area and production forecasts to 46.3 million ha and 160 MMT respectively, with national yields at 3,456 kg/ha.
• In other news, Brazil’s production state of Rio Grande do Sul is expected to produce 55.3% more wheat this season, according to crop agency Emater, which estimates production will reach 4.07 MMT.
• Emater also says recent flooding in the state have already been accounted for in this estimate.

Argentina

Sales from Argentina's grains exports brought a total $1.98 billion in June, up by a quarter compared to the same month last year, the CIARA-CEC chamber of oilseed producers and grains exporters said.

• Compared to the previous month, however, export income from the country's main cash crops fell 24%, though the accumulated sum through the first half of this year remains stable compared to the same period last year.
• CIARA-CEC attributed the June figure to export duties applied after the government of President Javier Milei came to power last December, as well as weather impacts on corn and soybean harvests and "the relationship between input costs and grains."

Europe

European grain markets rose.

• Sep wheat on Paris based Euronext rebounded €5.5/t to €230.25/t.
• MATIF corn Aug ended up €2.5/t to €210.25/t, while rapeseed was up €10.25/t to €487.5/t.
• Prices on Euronext, as well as on physical markets, recovered from the decline in recent weeks.
• September 2024 wheat contract was back above the €230/t level.
• Corn prices followed wheat higher, albeit to a lesser extent.
• Rapeseeds have also increased, continuing the momentum seen last week.
• In France, the harvest, halted after the recent storms, will gradually resume.
• Farmers will try to make progress before further rainfall is forecast for part of the country at the end of the week.
• For the time being, winter barley yields have been disappointing.
• Disappointing early yield results and doubts about future yields in Europe are also supporting the rapeseed market, and by sympathy also the sunflower market.
• Operators are obviously worried about the future of the harvest and other winter crops, with particular attention on wheat production potential in both the Black Sea basin and Western Europe.

Ukraine

According to official data in the period January-June 2024, Ukrainian ports handled almost 52.7 mln tonnes of cargo, which is significantly higher than in 2023 (31.3 mln tonnes), the Ukrainian Sea Ports Authority reported.

• As noted in the report, more than half of the total figure (33.5 mln tonnes) has been the production of Ukrainian farmers.
• notably, in June of this year, the seaports of Ukraine handled 6.7 mln tonnes of cargo.
• That is 30% higher than in 2023.
• Of these, 4.1 mln tonnes of agricultural products were exported, the USPA added.

Russia

Russia has almost completed its sowing campaign and started harvesting the new crop in the southern regions of the country.

• As of June 21, farmers had seeded 28.5 million hectares of grains, compared to 30.5 million hectares in the same period in 2023.
• That included 12.6 million hectares of spring wheat, compared to 13.8 million last year.
• Weather is neutral for the new crop, but the hot weather may have a negative impact on spring wheat yields in the Centre and Volga region, according to the IKAR.
• However, the agency maintained the existing crop forecasts.
• The Ministry of Agriculture reported on June 26 that harvesting has started in 16 regions.
• Despite difficult weather conditions, initial results exceed last year's and 6.2 million tonnes of grain have been threshed.
• Russian southern regions indeed continued to report relatively high yields.
• Krasnodar and Stavropol yields remain noticeably above the previous year, which is surprising, especially for the latter.
• Conversely, Rostov yields are substantially below last year, though aligned with analysts expectations.

• In this context, Sovecon expects the current year's overall grain harvest will reach 127.4 million tons.
• Reflecting this smaller crop, Sovecon cut its 2024/25 Russian wheat export forecast to 46.1 million tons.
• For the 2023/24 season, which closed at end-June, wheat exports are estimated at 52.2 million tons.
• Sovecon kept unchanged its wheat exports export forecast in June to 4.0 million tons for this month.
• That is compared with 3.6 million tons in June 2023, but it would be a month-over-month reduction of 9.1% if realized and the lowest monthly volume since January.
• Grain exports indeed decreased to 0.79 million tons of grain last week from 0.83 million in the previous week.
• Exports included 0.68 million tons of wheat, down from 0.77 million tons a week earlier, per latest port data.
• Turkey has imposed a ban on wheat imports from 21 June to mid-October this year to protect Turkish farmers.
• As a result, Russian wheat export prices have declined for the fourth week in a row.
• Notably, according to the IKAR, the price of 12.5% protein Russian new crop wheat scheduled free-on-board (FOB) with delivery in late July was $226 per metric ton at the end of last week.
• That was $5 lower than the price a week earlier.
• Sovecon determined the price of wheat with a protein content of 12.5% with the nearest delivery at $227-229 a ton at the end of last week, down from $234-$236 a ton FOB.
• As for the other products, the price for the domestic 3rd class wheat, European part of Russia, excludes delivery was at 14,450 rbls/t, +100 rbls/t (Sovecon);
• Sunflower seeds was valued at 31,775 rbls/t, -250 rbls/t (Sovecon);
• Domestic sunflower oil was at 76,850 rbls/t, 0 rbls/t (Sovecon);
• The price for domestic soybeans was at 40,000 rbls/t, -125 rbls/t (Sovecon).
• Export prices for sunflower oil was at $910/t, -$10 (IKAR);
• The price for white sugar, Russia's south was at $729.76/t, +$3.93/t (IKAR).

Iran

According to a senior official at the Iranian Agriculture Ministry, the country has purchased some 5.6 million tons of wheat, worth over $1.647 billion from domestic producers since April in carrying out a national plan that guarantees the purchase of domestic production of the crop.

• That was 450,000 tons (eight percent) more than that of last year’s corresponding period when the government purchases stood at 5.125 million tons.
• So far, the government has paid over $692 million to the farmers which is nearly half of the sum that has to be paid.
• The southwestern province of Khuzestan supplied 1.6 million tons of wheat.
• It is estimated that between 14.5 and 15.5 million tons of wheat will be harvested from both irrigated and rainfed fields by the end of the crop year which will totally meet the domestic needs.
• According to USDA, Iran will produce 14 million tons of wheat in 2024.

Southeast Asia

India

India is likely to receive above-average rainfall in July after receiving 11% below average in June, the weather department said, keeping alive the possibility of higher farm output and economic growth in the country.

• All regions except northeastern states are likely to receive rainfall equating to more than 106% of the 50-year average in July.
• Summer rains usually begin in the south around June 1 before spreading nationwide by July 8, allowing farmers to plant crops such as rice, cotton, soybeans and sugarcane.
• The monsoon has covered nearly all parts of the country and will reach the remaining parts of the northern states of Rajasthan, Haryana and Punjab in the next two to three days, ahead of the usual schedule.
• La Nina weather pattern indeed is likely to develop during the second half of the monsoon season, which usually boosts rainfall.

Malaysia

Malaysian palm oil prices extended gains for the fourth straight session.

• Notably, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 1.74%.
• Dalian’s most-active soyoil contract rose 0.74%, while its palm oil contract gained 2.77%.
• Exports of Malaysian palm oil products for June fell 11.8% to 1,306,689 tons from 1,481,916 tons shipped during May, cargo surveyor Intertek Testing Services said on Friday.
• While according to AmSpec Agri, it fell 15.4% to 1,188,180 tons from 1,404,719 tons shipped during May.
• Cargo surveyor SGS estimates exports of Malaysian palm oil products for June at 1,202,864 metric tons, from 1,161,370 metric tons shipped during May, according to LSEG.
• Meantime, Indonesia has set its crude palm oil reference price for July at $800.75 per ton, up from $778.82 in June.
• The new reference price would put the export tax for CPO at $35 per ton and levy at $85.
• Also, oil prices rose, helped by expected peak summer consumption and OPEC+ production cuts, and making palm a more attractive option for biodiesel feedstock.

Australia

Wheat and barley markets in Australia remained relatively unchanged from Friday.

• In Victoria, we saw a slight increase in canola trading values, with the main mover in the WA market for the new crop.
• Canola (CAN) bids indeed were A$795/t FIS yesterday.
• Meantime, new season wheat bids remained around $375-80/t and feed barley $330/t, both FIS.
• ASX Jan 2025 wheat ended down A$1/t to $356/t, while ASX Jan 2025 barley continued to be unchanged at $A303.90/t.
• The RBA released its June Policy Meeting minutes today, and it's considering raising its 4.35% cash rate amid doubts policy was not restrictive enough to bring inflation - currently running at 4.0% - to its 2-3% target band.
• On the weather side, Southern Queensland and NNSW received widespread falls yesterday with most receiving 5-15mm, some spots of up to 25mm in NNSW.
• Minimal falls resulted for the rest of the cropping regions with some patchy falls of less than 10mm for parts of SNSW, Vic and SA but they were not widespread.

International grain and oilseed tenders & trade

• Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 129,660 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Wednesday.

Outside markets ...

Energy markets

Oil prices gained about 2% to a two-month high on Monday.

• Notably, Brent futures rose 1.9%, while U.S. West Texas Intermediate (WTI) crude rose 2.3%.
• That was the highest close for Brent since April 30 for a third day in a row and the highest for WTI since April 26.
• Hopes of rising demand during the Northern Hemisphere's summer driving season supported the market.
• In the US summer travel season picks up with the Independence Day holiday this week.
• The American Automobile Association has forecast that travel during the holiday period will be 5.2% higher than in 2023, with car travel alone 4.8% higher than a year earlier.
• This could help gasoline demand recover after a subdued first half of 2024.
• As a result, prices for U.S. oil products lifted by around 3% on Monday with diesel futures closing at their highest in 10 weeks and gasoline futures closing at their highest in eight weeks.
• Meantime, in the Caribbean Sea, Hurricane Beryl was expected to pass Jamaica on Wednesday and slam into the Yucatan Peninsula in Mexico on Friday before weakening into a tropical storm and entering the Bay of Campeche in the Gulf of Mexico, where Mexico produces much of its oil on Saturday.
• Also, so far this week, the market received data showing U.S. manufacturing contracted for a third straight month in June.
• On the other hand, a drop in a measure of prices paid by factories for inputs to a six-month low suggested that inflation could continue to subside.
• However, hopes of an interest rate cut by the Fed and rising political concerns in Europe and between Israel and Lebanon's Hezbollah group have also kept a floor under prices.

This morning, oil prices were little changed.

• Brent crude futures rose 28 cents to $86.88 per barrel as of 0634 GMT, while U.S. West Texas Intermediate (WTI) crude rose 20 cents to $83.58 a barrel.
• Some data showed that crude imports to Asia in the first half of 2024, were lower than last year.
• This was mainly because of lower imports into China.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London rose, hitting its highest level in nearly two months.

• The overall index rose5.3%, marking its highest level since May 9.
• The capesize index was up 10.1%, hitting its highest level since March 19.
• The panamax index fell about 0.3%.
• The supramax index fell 1.2%.

Equity markets

U.S. stock indexes posted moderate gains.

• The Dow Jones Industrial Average edged up 0.1%, the S&P 500 rose 0.3%, and the Nasdaq composite gained 0.8%.
• US stocks had some carryover support from a rally in European stocks as the Euro Stoxx 50 rose to a 2-week high.
• Strength in mega-cap tech stocks boosted the broader market.
• However, higher bond yields limited gains in stocks as the 10-year T-note yield climbed +8.5 bp to a 4-week high of 4.481%.
• Also, concern that the economy is losing momentum has been negative for stocks.
• The US Jun ISM manufacturing index unexpectedly fell 0.2 to a 4-month low of 48.5.
• The Jun ISM price paid sub-index fell -4.9 to a 6-month low of 52.1.
• US May construction spending unexpectedly fell -0.1% m/m.
• In Europe, the Euro Stoxx 50 closed up +0.73%.
• French parliamentary elections Sunday showed Marine Le Pen’s far-right party faces a tougher-than-expected road to an absolute majority.
• Meantime, the Eurozone Jun S&P manufacturing PMI was revised upward by 0.2 to 45.8.
• Also, German Jun CPI (EU harmonized) eased to +2.5% y/y from +2.8% y/y in May.
• In China, the Shanghai Composite rose to a 1-week high and closed up +0.92%.
• In Japan, the Nikkei Stock 225 Index rose to a 2-3/4 month high and closed up +0.12%.
• The Japan Jun consumer confidence index rose +0.2 to 36.4.
• The Japan Q2 Tankan large manufacturing business conditions rose +2 to 13.
• The Japan Jun Jibun Bank manufacturing PMI was revised down to 50.0.

This morning, Asian stocks were mixed.

• Tokyo's benchmark Nikkei 225 added 1.1%, as the weaker yen spurred buying of export-oriented shares.
• Elsewhere, Australia’s S&P/ASX 200 shed 0.4%, South Korea’s Kospi dropped 0.8%, the Hang Seng climbed 0.3%, the Shanghai Composite index edged up 0.1%, Taiwan’s Taiex gained 0.6%, while the SET in Bangkok slipped 0.4%.
• Data from Statistics Korea showed the country’s consumer inflation slowed to an 11-month low in June.

Currency trading

The dollar index rose.

• The dollar initially moved lower after EUR/USD rallied to a 2-week high as Frech political concerns eased when the far-right party won by a smaller-than-expected margin in the first round of France’s parliamentary elections.
• The Eurozone Jun S&P manufacturing PMI was revised upward.
• The dollar also came under pressure after the US Jun ISM manufacturing index and May construction spending unexpectedly declined.
• However, a jump in the 10-year T-note yield sparked a short covering in the dollar.
• Also, weakness in the yen supported the dollar after the yen tumbled to a new 37-year low against the dollar.
• Meantime, the euro fell back from its best levels after German Jun consumer prices eased.
• The yen came under pressure after the Japan Jun Jibun Bank manufacturing PMI was revised lower.
• Losses in the yen were limited by concerns that with Monday’s new 37-year low, Japanese authorities could intervene in the forex market at any time to support the yen.
• The Japan Jun consumer confidence index was right on expectations.
• The Japan Q2 Tankan large manufacturing business conditions rose, stronger than expectations.
• The Japan Jun Jibun Bank manufacturing PMI was revised down.

This morning, the Japanese yen fell to near a fresh 38-year low, reaching 161.67 yen to the dollar. The euro cost $1.0731, down from $1.0738.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Sep contract was up 16.6c/bu to 590.2c/bu;
• Kansas wheat Sep contract was up 13.2c/bu to 599.4c/bu;
• Minneapolis wheat Sep contract was up 19.2c/bu to 632.2c/bu;

• MATIF wheat Sep was up €5.5/t to €230.25/t;

• ASX wheat Sep contract was down A$5.2/t to A$347.3/t;

• US DWI Cash (durum wheat index) was down 0.46c/b to 704.69c/bu;

• 1CWAD (Canadian durum) avg spot price was down C$5.01/t to C$338.01/t.
• EDW (EU durum) Sep contract was down €2/t to €326/t;

• Chicago corn Sep contract was down 0.4/bu to 407c/bu;

• MATIF corn Aug was up €2.5/t to €210.25/t;

• Chicago soybeans Aug was up 12.4c/bu to 1146c/bu;
• Winnipeg canola Nov contract was up C$15.2/t to C$642.3/t;

• MATIF rapeseed Aug was up €10.25/t to €487.5/t;
• Brent crude Sep was up US$1.60/barrel to $86.60;
• WTI crude Aug was up US$1.84/barrel to $83.38;

• BADI (Baltic Dry Index) was up 108 points to 2.158;

• Dow Jones was up 50,66 points to 39.169,52;
• S&P 500 was up 14,61 points to 5.475,09;
• NASDAQ Composite was up 146,70 points to 17.879,30;
• US dollar index (Sep '24) was up 0.042 points to 105.587;

• AUD/USD weaker at US$0.6660;
• USD/CAD firmer at $1.3735;
• EUR/USD firmer at $1.0740;
• USD/RUB firmer at ?86.7507.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

Note:

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