June 25, 2024 - Newswires

Soybeans rose rose on flooding fears; corn slid, while wheat mixed ...

Please to note:

"As the 2024 harvest started, 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 were mixed on Monday.

Corn prices eased 0.34%.

Soybeans rose 1.27%.

The rest of the soy complex was mixed as soymeal jumped 3.04%, while soyoil fell 1.02%.

Wheat prices were mixed, but mostly lower as Chicago SRW stumbled 1.6% lower, Kansas City HRW picked up 0.04%, and Minneapolis spring wheat slid 1.02%.

• Corn fell on acreage expectations ahead of a USDA report on Friday, although rebounded after falling during the session to its lowest since April 2.
• Analysts forecast 90.353 million acres of corn have been planted with corn, up from 90.036 million forecast in March.
• Flooding from thunderstorms over the weekend have impacted only some corn-growing areas of the U.S. Midwest.
• Also, forecast shifted wetter for much of the areas east that have remained drier.
• Meantime, Weekly Export Inspections data showed a total of 1.117 MMT of corn shipped during the week that ended on June 20.
• That was more than double the same week last year, but a 19.05% drop from the previous week.
• Accumulated exports have totaled 41.62 MMT this marketing year a 28.13% improvement from a year ago.
• Soybeans rose after trading in the previous session at their lowest level since 2020.
• Storms marched through the Midwest over the weekend, with localized flooding in Minnesota, Iowa and Wisconsin threatening the soybean crop.
• Prior to USDA’s updated acreage report that will be released Friday, analysts think the agency will show soybean plantings at 86.753 million acres.
• If realized, that would be more than 200,000 acres above USDA’s last estimate from March.
• Meantime, the weekly export inspections report from FAS indicated 342,293 MT of soybeans shipped in the week that ended on 6/20.
• That was well above the same week from 2023, though just slightly above the previous week.
• Total shipments for the marketing year, however, have totaled just 41.23 MMT, which is down 16.2% from the same period last year.
• Separately, the USDA issued a private export sale announcement of 228,000 MT of soybean meal for the 2024/25 marketing year to the Philippines.
• Wheat prices fell, meantime, hitting its the lowest level since April 19, with analysts citing U.S. harvest pressure.
• The National Weather Service posted flood warnings, in southeast South Dakota, northwest Iowa and southern Minnesota.

• Ahead of Friday morning’s key acreage report from USDA, analysts expect to see all-wheat plantings at 34.197 million acres in the current season.
• If realized, it would be modestly higher than the agency’s last estimate of 34.135 million acres in March.
• Meantime, USDA’s Export Inspections report showed a total of 342,692 MT of wheat shipped during the week that ended on June 20.
• That was a 16.43% decline from the previous week, though still 67% above the same week last year.
• In the first 3 weeks of the new marketing year, export shipments have tallied 1.05 MMT, 38.3% above the same few weeks last year.

In this context ...

• Spot basis bids for soybeans and corn increased in the U.S. Midwest as relatively weak futures prices supported basis offers, discouraging farmers from selling.
• Notably, corn basis bids increased by 4 cents at a corn processor in Iowa and by 5 cents at a processor in Nebraska, while corn bids decreased by 1 cent at an Indiana river terminal.
• Soybean basis bids increased by 15 cents at a processor in Decatur, Indiana, and ticked up by one cent at an Iowa river terminal, and by 10 cents at an Iowa processor.
• Buyers sought to incentivize farmer selling amid relatively strong crush margins.
• The wheat basis increased by 10 cents at a wheat processor in Chicago, and by 5 cents at an elevator in Toledo, Ohio.

• Spot basis bids for hard red winter (HRW) wheat held steady, as the harvest in the U.S. Plains advanced.
• Protein premiums for railcar wheat to and through Kansas City were unchanged.
• Commodity funds were net sellers in CBOT corn, wheat, and soyoil contracts, while they were buyers in soybean and soymeal contracts.

After the sessions close ...

The CFTC report showed large speculators trimmed their net short position in CBOT Trade corn futures in the week to June 18, while increasing their short positions in wheat and soybeans.

Meantime, the USDA in its Weekly Crop Progress report said, the condition of the U.S. corn and soybean crops deteriorated after a week of sweltering heat in the Midwest.

• However, both ratings were still the highest for this time of the season in four years.
• Notably, the USDA rated 69% of the corn crop as good to excellent, down 3 percentage points from a week ago.
• The report showed 97% of the US corn crop emerged by June 23, with 4% already silking, both 1% ahead of normal.
• For soybeans, data indicated that 97% of the US mean crop as planted by Sunday, 2% ahead of normal, with emergence 3% faster than average at 90%.
• USDA also tallied 8% of the crop blooming, 2% above normal.
• However, the USDA rated 67% of the crop as good to excellent, down 3 percentage points from last week.
• 97% of the US wheat crop was headed, 2% faster than normal.
• Condition ratings for spring wheat, grown in the northern Plains, declined from 76% last week, to 71% as good to excellent.
• Meanwhile, the harvest of the U.S. winter wheat crop was advancing ahead of the average pace, with the USDA saying the winter wheat harvest was 40% complete.
• Winter wheat was 52% in good to excellent condition, according to the USDA, vs. 49% a week ago.

This morning ...

Chicago wheat prices rose. Soybean and corn prices were flat.

• Notably, the most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.2% at $5.72 a bushel by 0451 GMT, corn was down 0.4% at $4.37-1/2 a bushel and soybeans were 0.2% lower at $11.28 a bushel.

South America

Brazil

According to AgRural, farmers in Brazil's key center-south region had harvested 34% of their second corn crop for the 2024 cycle as of last Thursday.

• That was the fastest pace in more than a decade.
• Work in the fields was up 13 percentage points from a week earlier and well above the 9% reported a year ago, driven by the states of Mato Grosso and Parana.
• Brazil's second corn crop is expected to reach 88.12 million metric tons this season, according to the country's crop agency Conab.

Europe

European grain markets were mixed.

• September wheat closed down 1.2% at 221.75 euros ($237.85) a metric ton after earlier on Monday falling to 220.75 euros, its lowest since April 24.
• The contract has lost about 18% over the last four weeks.
• At the end of the day, the corn Aug contract was up €0.5/t to €209/t, while rapeseed was unchanged after a busy session.
• Wheat prices fell to two-month lows, as hot and dry weather forecast in Europe was expected to benefit crops after repeated rain, and as the harvest progresses in the northern hemisphere.
• Weather has also improved in the Black Sea region.
• Meantime, European Union crop monitoring service MARS, lowered most of its yield forecasts for this year's crops in the bloc, citing excess water in western Europe and dry weather in some southeastern countries.
• Notably, in its monthly report, MARS pegged the average yield of soft wheat at 5.86 metric tons per hectare, down from 5.92 t/ha forecast in May.
• For durum wheat, the drop is more marked, at around -4% compared with May, with a potential of 3.30 t/ha.
• MARS also cut its grain maize yield forecast to 7.55 t/ha from 7.59 t/ha last month and lowered the projected sunflower yield to 2.20 t/ha from 2.25 t/ha.
• The average rapeseed yield this year was expected at 3.16 t/ha, down from 3.21 t/ha forecast last month.
• For sugar beet, the EU yield was projectedat 74.4 t/ha, down from 75.4 t/ha expected in May.
• This questioning of volumes and the observed fall in prices prompted some importing countries to position themselves for purchases, such as Algeria via the OAIC and Egypt via the GASC.
• The results of these two tenders will enable us to gauge the attractiveness of European origins.

Russia

Argus cut its forecast for Russian wheat output this year to a three-year low of 79.5 million metric tons, down nearly 12 million tons from 2023.

• The forecast includes 56.6 million tons of winter wheat production, based on a yield at 3.65 tons per hectare, after a virtual crop tour in the southern and central regions of the country, Argus said.
• Argus forecasts Russia's spring wheat production this year at 22.8 million tons.
• However, the Russian Agriculture Minister Oksana Lut said, 2024 Russian grain harvest will reach 132 million metric tons including wheat at 86Mt, adding that it might be adjusted later.
• The ministry indeed put the initial average wheat yield at 5.2 tons a hectare, after 12,000 hectares have been harvested.
• On this wake, IKAR raised its forecast for Russia's wheat crop to 82 million metric tons, after specifying production by regions.
• Sovecon said early yield data had supported a bearish case for wheat, putting Russia's wheat harvest at 80.7.
• Some regions, such as Krasnodar and Stavropol, indeed were largely spared from frost damage, and favourable rains have been falling over the past few days in central Russia, another important winter wheat-producing region.
• This could suggest more moderate losses in winter wheat production than those anticipated a few weeks ago.
• Meantime, as of June 14, farmers had seeded 28.1 million hectares of grains.
• That included 12.5 million hectares of spring wheat.
• On the demand side, Russian grain exports increased to 0.83 million tons last week, up from 0.80 million in the previous week.
• Exports included 0.77 million tons of wheat, down from 0.78 million tons a week earlier, per latest port data.
• As a result, Russian wheat export prices continued to decline last week.
• According to the IKAR, the price of 12.5% protein Russian new crop wheat scheduled free-on-board (FOB) with delivery in July was $231 per metric ton at the end of last week.
• That was $3 lower than the price a week earlier.
• Sovecon pegged the price of wheat with a protein content of 12.5% with the nearest delivery at $234-236 a ton at the end of last week, down from $244-$248 a ton FOB.
• As for the other products, the price for domestic 3rd class wheat, European part of Russia, excludes delivery was at 14,350 rbls/t, -200 rbls/t (Sovecon).
• The price for sunflower seeds was at 32,025 rbls/t, -225 rbls/t (Sovecon).
• The price for the domestic sunflower oil was at 76,850 rbls/t, -1,325 rbls/t (Sovecon).
• The price for the domestic soybeans was at 39,875 rbls/t, -575 rbls/t (Sovecon).
• The export price for sunflower oil was at $920/t, -$10 (IKAR).
• The price for white sugar, Russia's south was at $725.83/t +$22.96/t (IKAR).
• Meantime, Sovecon estimated wheat exports in June at 4.0 million tons.
• That was up compared to 3.6 million tons in June 2023, if realized.

Southeast Asia

India

Indians bought a record 500,000 metric tons of sunflower oil for June delivery.

• The competition between leading suppliers Russia and Ukraine made sunflower oil cheaper than soyoil and palm oil.
• A few weeks ago, crude sunoil was available at $940 a metric ton, including cost, insurance and freight (CIF), in India for June delivery, while soyoil and palm oil were offered around $1,015 and $950 a ton, respectively.
• Sunoil usually holds a premium of more than $100 per ton over soyoil and palm oil.
• Russia and Ukraine, as well as Argentina, have been aggressively competing and offered sunoil at a lower price than other oils.
• Around 320,000 metric tons of sunflower oil have been discharged at various Indian ports so far this month.
• India on an average bought 250,000 tons of sunflower oil every month in the last marketing year, mostly from Black Sea region.

Malaysia

Malaysian palm oil prices ended flat.

• The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed 0.03% lower.
• Poor exports and continued weakness in competing edible oils weighed on the contract.
• While traders were awaiting estimates for exports for June 1-25, due this morning independent inspection companies had said exports during that period fell between 8.1% and 12.9% from a month earlier.
• Dalian’s most-active soyoil contract fell 0.33%, while its palm oil contract fell 0.73%.
• Meanwhile, Indonesia’s palm oil exports in April were 2.18 million metric tons, up 2.06% from a year earlier, the Indonesia Palm Oil Association (GAPKI) said, while April crude palm oil output was 4.11 million tons, versus 4.1 million tonnes in March.
• Also, crude oil prices firmed slightly, making palm a more attractive option for biodiesel feedstock.

This morning, Malaysian palm oil prices hit a nearly one-month low, falling for a third consecutive session on weak demand and concerns over growing stockpiles.

• Notably, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange slid 0.95% by the midday break, hitting its lowest since May 27.
• Weak exports and low demand from China, and a narrowing spread between palm oil and soy oil is putting pressure on the contract.
• Also, outlook on the contract is pessimistic due to growing concerns over stock levels.
• Fitch Ratings said it expects the contract to weaken from the second half of the year on higher global vegetable oil supply as better rainfall due to La Nina drive production, especially in larger producer Indonesia.
• Also, Indians bought a record 500,000 tons of sunflower oil for June delivery, as competition between leading suppliers Russia and Ukraine made it cheaper than soyoil and palm oil.
• As a result, "spot prices have weakened after exceeding USD950 per ton in early April 2024, and Fitch assumes they will average USD775 per ton in 2024," it said in a note.

Australia

Rainfall is developing again for the WA wheat belt where it is now in stark contrast from where they were 6 weeks ago when most of the state was on a knife’s edge.

• NDVI imagery showed the uptick in growth which is now tracking at just below average.
• No surprise that NDVI imagery for SA shows growth is well below average and close to the bottom of the 20-year range for the EP and northern SA.
• Meanwhile, we can see an improvement in Murraylands and the southeast after recent rainfall.
• Vic and southern NSW are currently showing average to above average crop growth.
• Central west, northwest and northern NSW are currently showing growth at the top of the 20-year range.
• Despite a recent decline, NDVI for the southwest and Darling Downs is still off the charts, while CQ is showing average to below average vegetative growth.
• Meantime, a highly pathogenic strain of avian influenza has spread to an eighth poultry farm near Melbourne, the government of Australia's Victoria state said, taking the total number of infected facilities in the country to 10.
• Australia is dealing with three parallel outbreaks of bird flu, two near Melbourne and one near Sydney.
• Each involves a different strain of the virus.
• Victorian authorities said the new infection was within a quarantine zone.
• However, the flu has hit egg farms, and around 1.5 million birds have been or will be killed to control the spread of the virus.
• In this context, Aussie local markets were quiet yesterday.
• The ASX Jan 25 eastern Australian wheat contract ended the day down another $5/t at $351/t, following the offshore lead.
• Meanwhile, the ASX Jan 2025 barley continued to be unchanged at $A303.90/t.

International grain and oilseed tenders & trade

• Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) bought an estimated 135,000 metric tons of animal feed corn all expected to be sourced from South America in an international tender this morning. It was bought in two consignments, both at an estimated $240.06 a ton cost and freight (c&f) included, with some also purchased at a premium over Chicago corn futures. One consignment of about 67,000 tons was bought from trading house CJ International with an extra $1.75 a ton surcharge for additional port unloading. Part of CJ International’s consignment was bought at an estimated premium of 173 U.S. cents a bushel over the Chicago September corn contract CU24. The corn was for arrival in South Korea around Nov. 1. Another consignment of 68,000 tons was bought from trading house Pan Ocean with an extra $1.50 a ton surcharge for additional port unloading. Pan Ocean’s consignment was for shipment from South America between Sept. 3-Oct. 2 for arrival in South Korea around Nov. 10.
• The Korea Feed Association (KFA) Busan section in South Korea purchased around 66,000 metric tons of animal feed corn expected to be sourced from either South America or South Africa in a private deal late on Friday. The corn was believed to have been purchased from trading house Cargill at an estimated $243.74 a ton c&f plus a $1.25 a ton surcharge for arrival in South Korea around Oct. 30.
• Egypt cancelled an international soyoil tender due to "unsuitability of prices", the country's General Authority for Supply Commodities (GASC) said on Monday. Egypt bought 25,000 metric tons of soyoil on the local market, GASC added. GASC gave no more details, but it's believed that the Egyptian-produced soyoil was all purchased at 47,000 Egyptian pounds per ton, equating to about $975 a ton, from four suppliers. This compared with a lowest offer of $1,052 a ton, cost and freight included, for imported soyoil submitted in the international tender.
• GASC also said on Monday it was seeking wheat in an international tender for arrival Aug. 21 to 31 and/or Sept. 1 to Sept. 10. GASC said in a statement traders should submit bids for payment at sight using funding from the International Islamic Trade Finance Corporation (ITFC). The deadline for offers was today, June 25. The lowest price offered in the tender has been $227/t FOB, offered by Olam, for 60k MT of Russian origin, with loading from Kavkaz port.
• Jordan's state grain buyer is tendering today to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
• Algeria's state grains agency OAIC has issued an international tender to buy soft milling wheat for shipment to two ports only. The tender sought a nominal 50,000 metric tons but the shipment to two ports generally indicates a small purchase is planned. The deadline for submission of price offers in the tender is Wednesday, June 26, with offers having to remain valid until Thursday, June 27. The wheat is sought for shipment in several periods from the main supply regions including Europe: Aug. 1-15, Aug. 16-31, Sept. 1-15, Sept. 16-30, Oct. 1-15 and Oct. 16-31. If sourced from South America or Australia, shipment is one month earlier. The wheat should be unloaded in the ports of Mostaganem and/or Tenes.
• Jordan's state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley. The deadline for submission of price offers in the tender is tomorrow June 26.

Outside markets ...

Energy markets

Oil prices rose about 1%.

• Notably, Brent futures for August delivery gained 0.9%, while U.S. crude settled 1.1% higher.
• The prospect of strong summer driving demand, tensions in the Middle East, and drone attacks on Russian refineries supported the market.
• An easing U.S. dollar added to the crude price strength.
• Also, EU countries agreed on a new package of sanctions against Russia over its war in Ukraine, including a ban on reloading Russian liquefied natural gas (LNG) in the EU for further shipment to third countries.
• In Ecuador, state oil company Petroecuador has declared force majeure on deliveries of Napo heavy crude for export after the shutdown of a pipeline and oil wells owing to heavy rain, wire sources said on Friday.

This morning oil prices were little changed.

• Brent futures for August settlement eased 5 cents to $85.96 a barrel as of 0640 GMT, while U.S. crude futures were down 3 cents at $81.60 a barrel.
• Still, investors are cautious about the potential for further oil price increases on concerns that high interest rates will limit growth in fuel consumption by curtailing the economy.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London fell, weighed down by a dip in rates for the capesize and panamax vessel segments.

• The overall index fell 1.2%.
• The capesize index lost 1.6%.
• The panamax index edged lower about 1.9%, hitting its lowest level since June 10.
• The supramax index was up 0.5%, hitting its highest level since May 16.

Equity markets

U.S. stock indexes settled mixed, with the Dow Jones Industrials climbing to a 1-month high.

• The Dow Jones Industrial Average rose 0.7%, the S&P 500 slipped 0.3%, while the Nasdaq composite was down 1.1%.
• Truist Advisory Services downgraded the technology sector to neutral from overweight, citing valuation concerns.
• As a result, Nvidia’s stock were down nearly 13% in just three days, Super Micro Computer dropped 8.6%.
• Weakness in technology stocks weighed the overall market.
• Conversely, the strength in energy stocks was supportive for the broader market.
• Also, dovish comments from Chicago Fed President knocked T-note yields lower and supported stocks.
• The 10-year T-note yield fell -0.7 bp to 4.248%.
• Meantime, the US Jun Dallas Fed manufacturing outlook survey rose +4.3 to -15.1.
• In Europe, the Euro Stoxx 50 rose to a 1-week high and closed up +0.89%.
• The German Jun IFO business climate index unexpectedly fell -0.7 to 88.6.
• China's Shanghai Composite fell to a 3-3/4 month low and closed down -1.17%.
• Japan's Nikkei Stock 225 Index climbed to a 1-week high and closed up +0.54%.

This morning, Asian stocks rose.

• Japan’s benchmark Nikkei 225 added 0.5%, the Hang Seng in Hong Kong was 0.5% higher, the Shanghai Composite index dipped 0.3%, Australia’s S&P/ASX 200 gained 0.9%, in South Korea, the Kospi climbed 0.5%, Taiwan’s Taiex lost 0.3%, while the SET in Bangkok edged 0.1% higher.
• Data from the Bank of Japan this morning showed the services producer price index in May was up 2.5% compared to the same period last year, a slowdown from the 2.7% increase seen in April.

Currency trading

The dollar index fell, on Monday.

• The US Jun Dallas Fed manufacturing outlook survey rose, but was slightly weaker than expectations.
• Chicago Fed President said it may be appropriate for the Fed to start thinking about whether restrictive policy is putting too much pressure on the economy.
• San Francisco Fed President said if inflation falls more slowly than expected, it would be appropriate for the Fed to hold interest rates higher for longer, but if inflation falls quickly or the labor market cools more than expected, cutting rates would be necessary.
• As a result, the 10-year T-note yield fell.
• Meantime, strength in the euro and the yen weighed on the dollar.
• The EUR/USD indeed rose on hawkish comments from ECB Executive Board member Schnabel.
• However, gains in the euro were limited after German Jun IFO business confidence unexpectedly declined.
• Also, the USD/JPY fell, with the yen recovering from an 8-week low against the dollar.
• Comments from Japan's top currency official, Vice Finance Minister Kanda, fueled speculation that Japanese officials are close to intervening in the forex market to prop up the yen.
• Also, the 10-year JGB bond yield climbed to a 1-1/2 week high of 1.001%.

This morning, the yen rose to 159.37 vs the dollar, after closing at 159.59 yen on Monday. The euro rose to $1.0736 from $1.0732.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Jul contract was down 9c/bu to 552.4c/bu;
• Kansas wheat Jul contract was up 0.2c/bu to 581.4c/bu;
• Minneapolis wheat Jul contract was down 6.2c/bu to 605.2c/bu;

• MATIF wheat Sep was down €2.25/t to €222.25/t;

• ASX wheat Jul contract was down A$3/t to A$341/t;

• US DWI Cash (durum wheat index) was down 22.95c/bu to 707.20c/bu;

• 1CWAD (Canadian durum) avg spot price was down C$0.34/t to C$357.41/t.
• EDW (EU durum) Sep contract was unchanged to €340/t;

• Chicago corn Jul contract was down 1.4/bu to 433.4c/bu;

• MATIF corn Aug was up €0.5/t to €209/t;

• Chicago soybeans Jul was up 14.6c/bu to 1175.2c/bu;
• Winnipeg canola Jul contract was down C$5.4/t to C$600.7/t;

• MATIF rapeseed Aug was unchanged to €462/t;

• Brent crude Aug was up US$0.77/barrel to $86.01;
• WTI crude Aug was up US$0.90/barrel to $81.63;

• BADI (Baltic Dry Index) was down 24 points to 1.973;

• Dow Jones was up 260,88 points to 39.411,21;
• S&P 500 was down 16,75 points to 5.447,87;
• NASDAQ Composite was down 192,54 points to 17.496,82;
• US dollar index (Sep '24) was down 0.322 points to 105.121;

• AUD/USD firmer at US$0.6657;
• USD/CAD weaker at $1.3651;
• EUR/USD firmer at $1.0732;
• USD/RUB weaker at ?87.9980.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

Note:

This Newsletter is a free version of the daily report from "Banca del Grano".

To access all our services, please register on www.bancadelgrano.it or send a request to [email protected] …