July 8, 2024 - Newswires

Corn, beans, and wheat all posted a nice bounce into the weekend ...

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 morning, Farmer Family ...

US farm markets rose on Friday.

Corn prices moved 1.23% higher.

Soybeans gained 0.73%.

The rest of the soy complex also was in the green, as soymeal bouced 2.03%, while soyoil advanced another 1.87%.

Wheat prices rallied with Chicago SRW jumping 2.87%, Kansas City HRW climbed 2.66%, and Minneapolis spring wheat rose 1.69%.

• Corn and soybeans rose on concerns over dry, hot weather disrupting the U.S. crop during its crucial growing period.
• Rains over this week are spottier according to the 7-day QPF, with very southern portions of the WCB an inch or less of coverage and the ECB with trace amounts.
• On the demand side, soybean export sales landed on the lower end of expectations and corn sales fell below a range of trade expectations.
• Delayed Export Sales data from USDA indeed indicated 357,152 MT in old crop corn bookings during the week of 6/27.
• That was 34.1% below the previous week and a 12-week low.
• New crop sales totaled 311,538 MT in that week.
• For soybeans, sales were at 228,379 MT.
• That was a 4-week low.
• New crop bookings however were tallied at the second largest this marketing year of just 150,310 MT.
• For wheat, prices spiked amid an uptick in demand for U.S. wheat due to a weaker dollar and the availability of desirable new-crop wheat.
• The dollar index reached a three-week low.
• Meanwhile, Export Sales report showed all wheat bookings running 805,318 MT during the week that ended on June 27.
• That was above trade estimates for 350,000 to 700,000 tons.
• The market was also supported by news from France with yields at an eight-year low after torrential rains.
• Trade however remained light between the market's closure on Thursday due to the U.S. Independence Day holiday and ahead of the weekend, with operators covering short positions.

In this context ...

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

• The corn basis increased by 5 and 8 cents per bushel at elevators in Chicago, Illinois and Council Bluffs, Iowa, respectively. It increased by 2 cents at a river terminal in Morris, Illinois.
• The corn basis increased by 1 cent at an elevator in Cincinnati, Ohio; 2 and 4 cents at ethanol plants in Union City, and Indiana, while were up 2 cents at a river terminal in Seneca.
• The soy basis increased by 2 cents at a river terminal in Davenport, Iowa and by 1 cent at another in Morris. Basis gained a cent also at a river terminal in Seneca, Illinois.
• The soy basis lost 5 cents at a processor in Council Bluffs and 12 cents at a river terminal in Davenport
• Spot basis bids for hard red winter (HRW) wheat were steady.
• Protein premiums for HRW wheat shipped by rail to or through Kansas City were unchanged for every type of wheat.

• Commodities fund were net buyers in CBOT wheat, corn, soybean, soymeal, and soyoil contracts.
• Speculators hold net short positions in wheat, corn and soybeans, making those markets vulnerable to bouts of short covering that push up prices.

For the week ...

• Corn saw a better price action during this past week, as September was 0.74% higher, with December also backing up 0.81%.
• Soybeans also had a positive price movement, with August up 2.88% and new crop November rallying 2.32%.
• A little help came from soy meal as it rose 3.24% since the prior Friday.
• But the real support has been from bean oil, as posted a 12.43% move up.
• Wheat trended sideways for much of the week, but s stronger Friday “dressed up the close”.
• Chicago wheat was back up 2.96% in the September contract.
• Kansas City rallied just 2.1%.
• Minneapolis spring wheat climbed 3.3%.

This morning ...

Wheat prices fell as a steadying of the U.S. dollar and an abundant supply outlook prompted investors to renew their bearish stance. Corn and soybeans also fell as expectations of ample supply reasserted themselves after concerns that dry, hot weather would damage U.S. crops lifted prices last week.

• Notably, the most-active wheat contract on the Chicago Board of Trade was down 1.5% by 0551 GMT, while CBOT corn fell 0.9% and soybeans dipped 1.2%.
• The week start per normal with the Export Inspections in the afternoon.
• After the sessions close the USDA will out with their weekly Crop Progress report and updates to condition ratings and development pace.
• Skip ahead to Wednesday, and the EIA will update ethanol production and stocks data.
• The weekly Export Sales report will be back on the normal Thursday release schedule.
• The monthly CPI data will release also on Thursday.
• On Friday, PPI data will be updated, and the USDA will also release their monthly Crop Production and WASDE supply/demand estimates.

Canada

Producers are reporting overall good crop in the Saskatchewan province.

• Rain was widespread, with some areas receiving significant amounts along with isolated hail events.
• Excess moisture in some regions of the province is continuing to contribute to flooding of crops in low lying areas.
• In other regions of the province that have received reduced rainfall amounts, moisture would be welcome in the coming weeks to support crop, pasture and hay development.
• Overall, crop development continues to fall behind normal for this time of year due to the cooler and wet conditions.
• The potential for warmer temperatures and drier conditions in the coming weeks will support crop advancement and haying progress.
• Cropland topsoil moisture is rated as 14 per cent surplus, 80 per cent adequate and six per cent short.
• Three per cent of winter cereals are in the tillering stage, eight per cent at stem elongation, 22 per cent at flag leaf, 57 per cent heading and 10 per cent at the dough stage.
• Five per cent of spring cereals are at the seedling stage with 33 per cent tillering, 33 per cent at stem elongation, 23 per cent at flag leaf and six per cent heading.
• Six per cent of pulse crops are at the seedling stage with 71 per cent at the vegetative stage of development and 23 per cent flowering.
• Fifteen percent of canola and mustard are at the seedling stage, 48 per cent at the rosette stage, 26 per cent bolting and 11 per cent at the flowering stage.
• Thirty-three per cent of the flax is at the seedling stage with 63 per cent at stem elongation and four per cent flowering.

Meantime, per latest data from the Canadian Grain Commission ...

• Common wheat deliveries into the handling system during the week ending Jun 30, 2024, were at 349.7k mt, with durum at 69.2k mt as well.
• Canadian wheat exports for shipping weeks 48 came in at 335,2k mt, for a total of 19.757,8k mt YTD.
• Durum wheat exports were at 96,6k mt, for a total of 3.276,5k mt YTD.
• Commercial stocks stood at 1.691,7k mt for common wheat, and at 240.6k mt for durum.
• In this context, Western Canadian wheat bids were mixed, during the week ending July 5.
• Canadian Western Red Spring (CWRS) wheat prices were up C$3.42 to C$4.23 per tonne.
• Average prices were between C$281.05/tonne in southeast Saskatchewan to C$298.91/t in southern Alberta.
• Canadian Prairie Red Spring (CPRS) prices rose C$2.94 to C$2.96/tonne.
• The lowest average bid for CPRS was C$261.87 in southeast Saskatchewan, while the highest average bid was C$281.93 in northern Alberta.
• The average prices for Canada Western Amber Durum (CWAD) were down C$12.39 to C$18.81 per tonne, with bids between C$318.00 in northwest Saskatchewan to C$338.9 in western Manitoba.

South America

Brazil

Brazil’s corn exports totaled 850,892 MT during June according to trade ministry data.

• That was a 17.74% drop from the same month last year.
• Soybean exports out of Brazil totaled 13.947 MMT in June.
• That was 1.47% larger than the same month in 2023 and represent an increase from the May total.

Europe

European grain markets rose.

• Benchmark September on the Paris-based milling wheat closed 1.3% higher at 228.50 euros a tonne.
• It gained 1.7% for the week after rising 0.1% the previous week.
• MATIF corn Aug gained €4/t ending to €215/t, meanwhile rapeseed was up €7.5/t to €508.25/t.
• Wheat prices rose, buoyed by strong demand and concerns about global supplies, notably in the western part of the European Union.
• We saw purchases from Saudi Arabia and Tunisia.
• Also, concerns about the soft wheat crop in France have been confirmed by several bodies.
• Arvalis and Intercereales estimated that this year's soft wheat harvest in France would show a yield at an eight-year low and 11% below the 10-year average.
• Notably, the 2024 soft wheat yield in France was seen at 6.4 metric tons per hectare (t/ha), down 13% from last year.
• Based on the agriculture ministry's latest soft wheat area estimate for the 2024 harvest, at 4.40 million hectares, this would bring the harvest to 28.13 million tons.
• As for quality, the average protein content in this year's soft wheat crop was pegged at 11.6%.
• However, in spite this lower expectation for the 2024 crop, the French cereal industry should to be able to supply both the French and foreign markets, thanks hefty stocks from the previous season, Intercereales said.
• French soft wheat stocks in the 2023/24 season that ended on June 30 indeed are estimated at a 19-year high, more than 50% above the previous year, due to a large harvest, lower demand from starch makers and competition from Black Sea origins within the EU.
• Meanwhile farm office FranceAgriMer said French soft wheat ratings had deteriorated last week, pegging 58% of crops in good or excellent condition by July 1.
• The soft wheat harvest started, with 1% gathered by July 1.
• Conversely, durum wheat was rated at 64% as "good to excellent", up compared 62% the previous week.
• Winter barley ratings fell, with 56% of the crop seen in good/excellent condition.
• Winter barley was 33% harvested by 1st July.
• For spring barley, good/excellent ratings fell to 69%.
• For corn, prices firmed on fears of very hot and dry weather in Eastern Europe and the Black Sea basin.
• However, according to farm office FranceAgriMer, 82% "good to excellent", up compared with 81% the previous week.
• Rapeseed, meantime, has risen as a result of the disappointment of European production and the appreciation of the international oilseed complex.

North Africa

Algeria's Ministry of Agriculture, Rural Development and Fisheries signed a deal worth 420 million euro ($455 million)deal with Italy’s BF group for a project related to the production of grains and legumes on an area of 36,000 hectares, the Algerian minister of agriculture said on Saturday.

• The Italian company Bonifiche Ferrarsi SpA will develop an agricultural project in the Timimoun state adapted for growing wheat and legumes.
• 49% of the project funding will be provided by the Algerian investment fund, with the remainder financed by the Italian company.

Ukraine

Ukraine has harvested 3.4 million metric tons of grains so far, the farm ministry said on Friday.

• Farmers had threshed 1.6 million tons of wheat and 1.6 million tons of barley.
• Additionally, 166,400 tons of beans have been harvested.
• Farmers also started threshing soybeans.
• Meantime, the ministry increased its forecast for the 2024 grain harvest to 56 million tons.
• Together with oilseed the crop could total 77 million tons, it said.
• On the export side, Ukraine's grain exports in the 2024/25 marketing season rose to 718,000 metric tons by July 5.
• That is compared with 276,000 tons a year earlier.
• Overall exports included 245,000 tons of wheat, 468,000 tons of corn and 3,000 tons of barley.

Russia

Russian cash wheat price fell around US$2-4/t over the week depending on grade and shipping slot.

• With uncertainty around the export tax and the path of the war with the Ukraine it makes sense that the Russian exporter is going to be quick and aggressive to lock in a sniff of an accumulation margin.
• However, anomalous heat is expected in several Russian regions this week, said Roman Vilfand, scientific director of the Russian Hydrometeorological Center.
• According to him, temperatures in the Volgograd and Rostov regions could rise to +42°C.
• Meanwhile, rain, thunderstorms, and strong winds are expected in the Rostov region and Stavropol Territory.
• A lack of moisture in early spring, as well as a sharp increase in temperatures in April, triggered accelerated plant development in the Rostov region, said the region’s Minister of Agriculture, Konstantin Rachalovsky.
• The official expects grain production to decline compared to last year's record levels.
• Wheat yields in Southern Russia are exceeding expectations, Andrey Sizov said.
• However, exporters are encountering new issues, as initial supplies of 12.0-12.5% protein wheat are limited, potentially due to overall lower quality, the expert added.

China

Per latest report from the USDA attaché in Beijing, soybean production for MY 24/25 is forecast at 19.6 million metric tons (MMT).

• The planted area is seen at 9.95 million hectares (Mha).
• The relatively low and declining soybean meal (SBM) prices since the beginning of MY 23/24 could encourage more SBM use in feed production.
• The attaché raised its forecast for MY 24/25 rapeseed production to 15.8 MMT based on a slight gain in acreage to 7.4 Mha and higher yield.
• In this context, soybean imports are forecast unchanged at 103 MMT in MY 24/25.
• Stable imports for MY 24/25 are based on a slight increase in crushing demand from a modest increase in SBM consumption as lower prices allow feed mills to push up inclusion rates.
• Meantime, according to the Chinese Ministry of Agriculture and Rural Affairs (MARA) the number of sows in China declined by 6.2pc year on year to the end of May.
• China's sow herd stood at 39.96 million head at the end of May, data showed.
• The number of pigs slaughtered in China by pig enterprises rose 0.8% in January through May from the same period a year earlier to 136.04 million.
• Disease outbreaks and financial pressure were the reasons behind the decline with some further reductions expected in the subsequent months.
• Domestic wholesale pork prices have rallied from the March lows but still remain within the historically range.

Southeast Asia

Malaysia

Malaysian palm oil prices fell, but closed with their best week in five.

• Notably, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange ended down 0.66%.
• However, the contract gained 3.17% for the week, posting its second consecutive weekly gain.
• Traders took profits ahead of a long weekend, after the recent strong recovery.
• Malaysia's financial markets will be closed this morning for a public holiday, and trading will resume on Tuesday.
• According to some analysts, palm oil inventories in Malaysia rose for a third consecutive month in June as exports slowed, though output fell from the previous month.
• Malaysia's palm oil stocks indeed were seen at 1.83 million tons, up 4.53% from May-end.
• The Malaysian Palm Oil Board is scheduled to release its June data on Wednesday, July 10.
• Meantime, Dalian's most-active soyoil contract dropped 0.97%, while its palm oil contract lost 1%.

Australia

Yield prospects for Australia’s lentil and faba bean crops have brightened considerably in the past month.

• Rain has fallen in South Australia and Victoria finally, but germination has occurred later than normal for many crops, and in the depths of winter, so crops need more rains in coming weeks to put at least average yields in sight.
• However, while NNSW is forecast to receive 10-25mm rainfall today, SNSW and VIC are looking at less than 5mm, though more falls are predicted in the back end of the week.
• Meantime, chickpea crops in Queensland and northern New South Wales are looking at above-average yields.
• Chickpea prices had rallied in response to the latest news out of India, while lentils markets were bowing to pressure from the incoming Canadian crop.
• Faba bean values remained very high as current-crop stocks dwindle.
• Going inside the numbers, bids for new-crop chickpeas delivered up-country packer are sitting at $950 per tonne.
• That was down $50 from last month.
• Prices for faba beans in the prompt market remain high at around $650/t delivered.
• Lentil prices have dropped around $100/t in the past month, with prompt values now at around $900/t delivered Port Adelaide for Nipper types.
• Larger Jumbo-type lentils are trading at more like $960-$980/t.
• For wheat, Australia exported 1,596,844 tonnes of wheat and no durum in May, according to the latest data from the Australian Bureau of Statistics.
• The May total was down 14 percent from the 1,848,534t, including 3801t of durum, shipped in April.
• That also is compared with the 3.3 million tonnes (Mt) exported in May 2023.
• In this context, ASX Jan 2025 wheat ended down A$2/t to $355/t, on Friday.
• ASX Jan 2025 barley ended at $A303.90/t.
• Meanwhile, in the West there was a little bit of current crop buying activity late last week via Clear Grain Exchange for the protein grades in both Albany and Kwinana port zones at A$405/t FIS for H2 and $415/t for H1.
• New season wheat bids remained around $375/t, while feed barley $330/t, both FIS.
• However, the main story for the week has been new crop canola with canola (CAN) bids rising to $820/t FIS on Friday.
• In eastern Australian markets canola again continued its run higher this morning nearby and new crop.

International grain and oilseed tenders & trade

• Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley, to be loaded by Oct. 31 and arrive in Japan by Dec. 19, via a simultaneous buy and sell (SBS) auction that will be held on July 10.

Outside markets ...

Energy markets

Oil prices settled lower.

• Notably, Brent crude futures settled 1.02% lower, while U.S. West Texas Intermediate (WTI) crude futures settled down 0.9%.
• For the week, Brent rose 0.4%, while WTI futures posted a 2.1% rise.
• Rising possibility of a ceasefire deal in Gaza outweighed strong summer fuel demand and potential supply disruptions from Gulf of Mexico hurricanes.
• The head of Israel's Mossad has returned from Doha after an initial meeting with mediators trying to reach a Gaza ceasefire and hostage release deal, and negotiations will resume next week, Prime Minister Benjamin Netanyahu's office said.
• Mexico's major oil platforms are not expected to be affected by the Hurricane Beryl, but oil projects in U.S. waters to the north may be disrupted if the hurricane continues on its expected path.
• Meanwhile, the possibility that U.S. interest rate cuts are approaching, raising expectations for an increase in oil demand.
• U.S. job growth slowed marginally in June, but a rise in the unemployment rate, and moderation in wage gains pointed to an easing of labor market conditions, and could put a rate cut at the July meeting in their sights.
• On the supply side, the number of operating oil rigs in the U.S. were unchanged at 479 last week, holding at its lowest since December 2021, Baker Hughes said in its weekly report on Friday.

This morning, oil prices slid, as the prospect of a ceasefire deal in Gaza eased geopolitical tensions in the Middle East.

• Notably, Brent crude futures were down 0.4% as at 0646 GMT, while U.S. West Texas Intermediate crude was down 0.5%.
• However, investors were assessing potential disruption to U.S. energy supplies from Tropical Storm Beryl.
• The ports of Corpus Christi, Houston, Galveston, Freeport and Texas City closed on Sunday.
• Port closures could bring a temporary halt to crude and liquefied natural gas exports, oil shipments to refineries, and motor fuel deliveries from those plants.
• Investors were also watching for any impact from elections in the UK, France and Iran last week on geopolitics and energy policies.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London, continued to fall for the third successive session, and marking its worst week in six, as demand across all vessels declined.

• Notably, the overall index fell 2.7%, hitting an over one-week low.
• The capesize index dropped 4.2%.
• The panamax index shed about 1.4%. The index posted its third straight weekly fall.
• The supramax index fell 2 points to 1,335.

Equity markets

U.S. stock indexes settled moderately higher.

• The Dow Jones Industrial Average rose 0.17%, the S&P 500 gained 0.54%, and the Nasdaq Composite climbed 0.90%.
• Wall Street stock indexes closed firmer, with the tech-heavy Nasdaq and benchmark S&P 500 hitting record highs.
• Economic data showed U.S. labor market weakness boosting expectations for interest rate cuts as early as September.
• As a result, the 10-year T-note yield fell -8.4 bp to 4.275%, while megacap stocks rallied.
• Microsoft rose nearly 1.5% to end at a record high.
• Meta Platforms also scored an all-time closing high, gaining around 5.9% to push the information technology sector to a record high.
• S&P 500 communication services was the top performing sector, reaching its highest level since 2000.
• Going inside the number, US Jun nonfarm payrolls rose +206,000.
• However, May nonfarm payrolls were revised down to +218,000 from the previously reported +272,000.
• Also, the Jun unemployment rate unexpectedly rose +0.1 to a 2-1/2 year high of 4.1%.
• US Jun average hourly earnings eased to +3.0% y/y from +4.1% y/y in May, posting the slowest pace of increase in 3 years.
• Weaknesses in energy stocks have been a negative factor for the overall market after crude prices gave up an early advance and turned lower.
• Also, comments from New York Fed President Williams were slightly bearish for stocks.
• For the week, the S&P 500 gained 1.95%, the Nasdaq rose 3.5% pct, and the Dow climbed 0.66%.
• In Europe, the Euro Stoxx 50 fell back from a 3-week high and closed down -0.16%.
• Eurozone May retail sales rose +0.1% m/m.
• German May industrial production unexpectedly fell -2.5% m/m, marking the biggest decline in 17 months.
• In China, the Shanghai Composite fell to a 4-1/2 month low and closed down -0.26%.
• In Japan, the Nikkei Stock 225 Index fell back from a record high and closed unchanged.
• The Japan May leading index CI rose +0.2 to 111.1.
• Japan's May household spending unexpectedly fell -1.8% y/y, posting the biggest decline in 4 months.

This morning, Asian stocks fell.

• In Tokyo, the Nikkei 225 index was down 0.3%, despite official data showing the real wages fell 1.4% year on year in May.
• That was a decline for the 26th straight month.
• The weakening yen and higher commodity costs pushed up the cost of imports.
• Meanwhile the nominal wages rose just 1.9%.
• Elsewhere, Hong Kong’s Hang Seng index declined 1.8%, the Shanghai Composite index dropped 0.7%, Australia’s S&P/ASX 200 sank 0.8% to 7,763.20 while South Korea’s Kospi edged 0.1% lower to 2,859.20.
• The left-wing New Popular Front has won the most seats in the 2024 French legislative election, beating back the far-right but failing to win a majority.
• Thus, the result leaves France facing the stunning prospect of a hung parliament and worries of political and policy uncertainty.

Currency trading

The dollar index fell, posting a 3-week low.

• US Jun payroll report bolstered expectations for the Fed to cut interest rates this year.
• Also, strength in the British pound weighed on the dollar after a landslide victory by the UK Labour Party in Wednesday’s general election boosted the pound to a 3-week high.
• Losses in the dollar were limited by hawkish comments from New York Fed President who said we still” have a way to go” to reach our 2% inflation target on a sustained basis.
• Meantime, the EUR/USD rose, hitting a 3-week high.
• Gains in the euro were limited due to weaker-than-expected news on Eurozone May retail sales and German May industrial production.
• Also, concerns about the second round of France’s parliamentary elections on Sunday weighed on the euro.
• Also, the USD/JPY fell, with the yen climbing to a 1-week high against the dollar.
• The yen garnered support from Friday’s Japanese economic news that showed the May leading index CI rose more than expected.
• Strength in the yen however was limited after Japan’s May household spending unexpectedly declined.

This morning, the U.S. dollar rose to 160.75 Japanese yen from 160.72 yen.

The euro climbed above $1.08, but gains were tempered by the surprising results of the French parliamentary elections. Notably, the currency fell to $1.0819 from $1.0836 early in the session.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Sep contract was up 16.4c/bu to 590.4c/bu;
• Kansas wheat Sep contract was up 15.4c/bu to 599c/bu;
• Minneapolis wheat Sep contract was up 10.4c/bu to 633.2c/bu;

• MATIF wheat Sep was up €2.75/t to €228.25/t;

• ASX wheat Sep contract was up A$3.5/t to A$355/t;

• US DWI Cash (durum wheat index) was down 26.29 c/bu to 664.84c/bu;

• 1CWAD (Canadian durum) avg spot price was down C$3.49/t to C$329.18/t.
• EDW (EU durum) Sep contract was down €3/t to €322/t;

• Chicago corn Sep contract was up 5/bu to 410.4c/bu;

• MATIF corn Aug was up €4/t to €215/t;

• Chicago soybeans Aug was up 8.4c/bu to 1166.2c/bu;

• Winnipeg canola Nov contract was up C$8.3/t to C$658.2/t;

• MATIF rapeseed Aug was up €7.5/t to €508.25/t;

• Brent crude Sep was down $1.10/barrel to $86.54;

• WTI crude Aug was down US$0.72/barrel to $83.16;

• BADI (Baltic Dry Index) was down 55 points to 1.966;

• Dow Jones was up 67,87 points to 39.375,87;
• S&P 500 was up 30,17 points to 5.567,19;
• NASDAQ Composite was up 164,46 points to 18.352,76;

• US dollar index (Sep '24) was down 0.529 points to 104.548;

• AUD/USD firmer at US$0.6747;
• USD/CAD firmer at $1.3640;
• EUR/USD firmer at $1.0838;
• USD/RUB weaker at ?88.0132.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

Note:

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