June 27, 2024 - Newswires

Corn and soybeans faded into the red; wheat prices ended mixed ....

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Good afternoon, Farmer Family ...

US farm markets ended mixed, but mostly lower on Wednesday.

Corn prices stumbled 1.29% lower.

Soybeans eased 0.04%.

The rest of the soy complex was mixed as soymeal dropped 1.2%, while soyoil climbed 1.61%.

Wheat prices were mixed, as Chicago SRW ended 0.09% lower, while Kansas City HRW rose 0.69%, and Minneapolis spring wheat lifted 0.04%.

• Corn and soybeans both edged down.
• The market assessed the impact of floods on crops in the U.S. Midwest.
• Wet forecasts for much of the Corn Belt continued to do the bulls no favors.
• Operators positioned ahead of the release of USDA data due Friday.
• Swathes of the northwestern Midwest have been hit by floods, which have damaged fields and forced some farmers to replant, while other areas have contended with a heat wave.
• However, wet weather is expected to continue in most of the U.S. Midwest, and the extra rain may help replenish moisture that was lost during the previous week's heat wave.
• Also, any flooding related area losses will be deducted later on from harvested acres, and not in this week report.
• Meantime, the weekly EIA report showed 1.043 million barrels per day of ethanol was produced during the week of 6/21.
• That was a 14,000 bpd drop on the week.
• Stocks saw a draw of 194,000 barrels from the previous Friday to 23.423 million barrels.
• As a result, corn collapsed by the close, with several contracts posting new lows for the year.
• Soybeans reverted from the higher midday action to close with losses.
• Meanwhile product values were mixed, with soymeal down, and soyoil futures back up 66 to 83 points across the front months.

• Wheat prices on Chicago Board of Trade held steady, after notching a more than two-month low.
• Bargain buying and positioning ahead of the acreage report from the USDA, supported the market.
• Statistics Canada is scheduled to release its estimates of Canadian crop plantings later on Thursday.
• A heat wave in Europe this week is set to take a heavy toll on summer crops in the southeast, but it has been good news for farmers on the other side of the region.

In this context ...

Spot basis bids for corn were steady to firmer in the U.S. Midwest. Meanwhile, basis bids for soybeans were mixed.

• Notably, at Decatur, Illinois, a key processing hub, the soybean basis moved to 50 cents over the CBOT August futures contract, compared to 20 cents over the July contract a day ago.
• The 30-cent jump is more than the 22-cent spread between the two futures contracts, in effect raising the cash soybean bid.
• However, the soybean basis softened by 5 cents at a Cedar Rapids, Iowa, crushing site.
• The basis for soft red winter wheat firmed by a nickel a bushel at Toledo, Ohio, even as the wheat harvest progressed.
• Spot basis bids for hard red winter (HRW) wheat were steady in the southern U.S. Plains, as farmers in southern reaches of the crop belt neared the end of harvest and traders closely monitored weather.
• Buyers in regions that have been impacted by flooding are increasing basis bids, as farmers have been reluctant sellers of the crop.
• Meanwhile, flooding on rail lines has backed up grain movement and weighed on basis values in other areas.
• Flooding continues to complicate the movement of grain in southeast South Dakota, northwest Iowa and southern Minnesota.
• Commodity funds were net sellers of CBOT corn, soybeans and soymeal contracts, while they were net buyers of wheat and soyoil.

This morning ...

Chicago cornprices lost ground, with prices falling for a second session, while soybeans edged higher. Wheat prices inched higher after closing almost flat in the previous session.

• Notably, the most-active corn contract on the Chicago Board of Trade (CBOT) fell 0.6% to $4.23 a bushel by 1130 GMT, and soybeans added 0.1% to $11.06-1/2 a bushel.
• Wheat gained 0.2% to $5.61-1/2 a bushel.

Canada

The Manitoba Crop Report for the week ending 25 June noted variable rainfall was recorded across the province, with heavy rainfall in the Southwest, Central and Interlake regions.

• Accumulated rainfall in most areas has exceeded 150pc of normal since 1 May.
• Rapid advancement in winter cereal crop development continued and crop conditions were rated as good.
• Meantime, analysts expects Canada’s 2024-25 wheat area mostly to be unchanged in today’s Statistics Canada June update.
• Wheat area is expected to be 27.2 million acres (Mac) compared to 27Mac in March, with estimates ranging from 25.6Mac to 28Mac.
• Canola acreage also seen mostly unchanged at 21.5Mac.
• StatsCan May crush reported 920kt oilseed crushed, down 4pc from April but 20pc higher than May 2023.

Central America

The Panama Canal authority said on Wednesday that recent rains boosted water levels, allowing heavier ships with larger cargo loads to transit the canal's Neopanamax locks.

• The maximum ship depth for the key global waterway will be set at 47 feet (14.33 m) effective immediately, and on July 11, will deepen to 48 feet (14.63 m), the canal authority said in an advisory to clients.
• The authority also opened up another transit slot for Neopanamax ships for booking dates after Aug. 5, bringing the total number of available slots in both Neopanamax and Panamax locks to 35 slots.

Europe

European grain markets rebounded.

• Benchmark September milling wheat on Paris-based Euronext, closed 1.1% higher at 223.50 euros ($238.79) a metric ton.
• MATIF corn Aug contract ended up €1.25/t to €209.25/t, while rapeseed jumped €9.5/t to €469.75/t.
• Wheat prices rose as a fall in prices in recent weeks attracted strong international demand, though operators noted that EU wheat was still too expensive in the international tenders.
• The euro tumbled to an 8-week low, and that supported prices.
• For the moment, the focus is on harvest progress and yield figures.
• In France, cuttings of barley are accelerating, without showing any real improvement for the time being.
• The current period of rising temperatures accompanied by dry weather will enable progress to be made this week.
• Rapeseed prices meantime rose, returning to levels comparable to mid-June.
• Market players will be paying close attention to canola planting data for Canada and, of course, North American soybean acreage.
• Meantime, non-commercial market participants narrowed their net long position in Euronext's milling wheat futures and options in the week to June 21, data published by Euronext showed on Wednesday.
• Notably, non-commercial participants, reduced their net long position to 55,294 contracts from 92,942 a week earlier, the data showed.
• Commercial participants narrowed their net short position to 59,064 contracts from 97,839 a week earlier.
• In Euronext's rapeseed futures and options, non-commercial market participants switched to a net short position of 1,919 contracts from a net long position of 8,674 contracts a week earlier.
• Commercial participants switched to a net long position in rapeseed of 6,404 contracts from a net short position of 4,085 contracts a week earlier.
• In other news, the prices of goods consumed by the agriculture sector fell by 11% in the European Union during the first quarter, with most countries recording lower costs as volatility related to the war in Ukraine quells, the EU's statistics office said on Wednesday.
• The decline in input costs included a 31% drop for fertiliser and soil improvers, 16% for animal feeds, and 12% for energy and lubricants, compared to a year earlier.
• Out of 25 EU member states with available data, Portugal was the only one where input prices rose by 2%, while the Netherlands, Ireland, Hungary and Croatia recorded biggest drops of between 17% and 20%, the data showed.
• Twenty countries also recorded lower output prices, or prices of agricultural goods sold, which dropped by 6% on average, with a 28% drop in the price of cereals, Eurostat said.
• Output prices rose in five Southern European countries, led by a 20% increase in Greece.
• An expected impact from unfavourable weather conditions on harvested volumes pushed prices of potatoes up by 22% and those of fresh fruit by 20%, the statistics office said.

North Africa

Fertilizer prices in the Egyptian open market have increased by around 54% month on month in June to up to EGP 20,000 per ton.

• That is compared with EGP 13,000 per ton a month earlier.
• According to some commercial source, the country's fertilizer prices rose because the decrease in locally produced natural gas has significantly impacted factory operations, resulting in the inability to meet the increased demand for fertilizers for summer crops.
• The government official attributed the increase in fertilizers prices to the country having to import liquefied natural gas (LNG) to run fertilizer plants,.
• This came in light of the increase in the exchange rate of the US dollar against the Egyptian pound, resulting in an increase in the costs of production inputs.
• On June 25th, Abu Qir Fertilizers and Chemicals Industries Company suspended operations at its three factories due to a cut in natural gas supplies.

Ukraine

As of June 24, Ukraine's exports of agricultural products by road since the beginning of the month totaled 261 thsd tonnes, Spike Brokers reported.

• That was significantly lower than the May monthly figure (426 thsd tonnes).
• The Polish border remains the leader in exports with 106 thsd tonnes, while the Slovak border is the lowest with 18 thsd tonnes.
• At the Romanian border, exports amounted to 62 thsd tonnes, at the Moldovan border - 43 thsd tonnes, and at the Hungarian border - 31 thsd tonnes.
• The average daily exports at all borders decreased slightly and amounted to 10885 tonnes, which is 7% less compared to the penultimate week.
• The leaders of automotive exports in June remained unchanged: sunflower oil - 38 thsd tonnes and soybeans - 30 thsd tonnes.
• Meantime, prices for road transportation remained at the level of the previous week.
• Notably, as of June 26, market rates for transportation of agricultural products from western Ukraine amounted to EUR 118-134 to Central and Northern Italy, EUR 75-100 to northern Bulgaria, and EUR 115-130 to eastern Germany.
• For road transportation from the center of Ukraine, the rates are currently as follows: southern Romania - 75-100 EUR, Ukrainian Danube ports - 36-47 EUR, ports of Great Odesa - 25-34 EUR.

Russia

Russian consumer price growth quickened to 0.22% in the week to June 24, data from the state statistics service Rosstat showed on Wednesday.

• Weekly prices had grown 0.17% the week before.
• Russia's central bank held rates at 16% for the fourth meeting running on June 7, but gave its most hawkish signal yet that a hike may be coming at its next meeting on July 26 and said tight monetary conditions would be required for longer than previously thought.

China

China has provided 496 million yuan ($68.26 million) of additional natural disaster relief funds for several provinces affected by floods to help with emergency rescues, and the relocation and resettlement of victims, state media reported on Thursday.

• The Ministry of Finance and the Ministry of Emergency Management allocated the funds for Zhejiang, Anhui, Fujian, Jiangxi, Hubei, Hunan, Guizhou, and Guangdong provinces and Guangxi region, CCTV news said.

Southeast Asia

India

India allowed limited imports of corn, crude sunflower oil, refined rapeseed oil, and milk powder under the tariff-rate quota (TRQ), where importers pay nil or lower duty.

• Notably, the country has allowed imports of 150,000 metric tons of sunflower oil or safflower oil, 500,000 tons of corn, 10,000 tons of milk powder and 150,000 tons of refined rapeseed oil, the government said.
• The government has short-listed cooperatives and state-run companies, such as the National Dairy Development Board (NDDB), the National Cooperative Dairy Federation (NCDF), and the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED), for the imports.
• India, which does not allow cultivation of any genetically modified food crops, has rules in place to ensure that imports contain no trace of genetically modified organisms.

Malaysia

Malaysian palm oil prices ended higher.

• Notably, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 0.47%, but hovered near its lowest since May 17.
• It had earlier declined as much as 0.75%.
• Exports from Malaysia are weak, with cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia estimating shipments during June 1-25 likely falling between 16.1% and 16.9% from the same period in May.
• SGS also estimated exports for the period at 908,517 metric tons, down from 949,451 metric tons shipped during a month-ago period.
• However, operators are expecting the Malaysian Palm Oil Association forecast production during June 1-20 to decline 6.3% from a year ago.
• Also, Dalian’s most-active soyoil contract gained 0.5%, while its palm oil contract rose 0.9%.
• In addition, oil prices inched up nearing their highest level in almost two months.
• Higher crude oil prices make palm a more attractive option for biodiesel and feedstock.

Singapore

Congestion at Singapore’s container port is reportedly at its worst since COVID-19, reflecting the impact of prolonged vessel re-routing to avoid Red Sea attacks.

• Bottlenecks are also appearing in other Asian ports.

Australia

Feed grain values in south-eastern Australia found some support from domestic demand this week.

• This was centred in South Australia’s South East, and Victoria’s Western District, where hay, pulses and grain have been bought in an ever-widening arc.
• In northern New South Wales and southern Queensland, ideal growing conditions have consumers comfortable about new-crop hitting the market in volume from October.
• The BOM’s latest Climate Driver Update notes that the El Ni?o–Southern Oscillation (ENSO) is currently neutral.
• Sea surface temperatures in the central Pacific have been cooling since December 2023.
• Climate models suggest that sea surface temps in the central tropical Pacific are likely to continue to cool for at least the next 2 months.
• Four of seven models suggest temps are likely to remain at neutral ENSO levels, and the remaining three suggest the possibility of temperatures at La Ni?a levels from September.
• The Bureau’s ENSO Outlook is at La Ni?a Watch due to early signs that an event may form in the Pacific Ocean later in the year.
• ABS data released yesterday showed annual inflation increased to 4pc in May, from 3.6pc in April and was above expectations, increasing the chance of an interest rate rise in August.
• Meantime, the ASX Jan 25 contract ended the day unchanged yesterday at A$353/t.
• ASX Jan 2025 barley also was unchanged at $A303.90/t.

International grain and oilseed tenders & trade

• Saudi Arabia has issued tender to buy 595,000 metric tons of wheat for arrival from September through December, the General Food Security Authority (GFSA) said in a statement on Thursday.
• Algeria’s state grains agency OAIC is believed to have bought about 130,000 to 150,000 metric tons of milling wheat in an international tender on Wednesday which sought limited shipment to two ports only. Purchases reported were around $248 to $250 a metric ton cost and freight (c&f) included. The wheat was optional origin was thought likely to be sourced from the Black Sea region including Russia, Ukraine, Romania and Bulgaria. The tender requested to unload the wheat only in the harbours of Mostaganem and/or Tenes ports. The wheat was 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.
• Jordan's state grain buyer is believed to have made no purchase in an international tender for 120,000 metric tons of animal feed barley which closed on Wednesday. A new tender has been issued closing on July 3. Shipment in the tender was sought in a series of possible combinations in 50,000 to 60,000 ton consignments. Possible shipment combinations were between Aug. 1-15, Aug. 16-31, Sept. 1-15 and Sept. 16-30.
• Jordan’s state grain buyer reportedly purchased 60kt of milling wheat from optional origins at $256.35/t c&f for Aug shipment and separately seeks wheat for Aug/Sep shipment in a 2 July tender.?Shipment in the new tender is sought in a series of possible combinations in 60,000 tonne consignments. Possible shipment combinations are in 2024 between Aug. 16-31, Sept. 1-15 and Sept. 16-30.
• South Korea’s Nonghyup Feed Inc. purchased 65kt feed wheat from optional origins at $266.93/t c&f plus a $1.50/t port unloading surcharge for Oct arrival and 135kt of feed maize from South America at $240/t c&f, for Oct/Nov shipment.

Outside markets ...

Energy markets

Oil prices fell settled slightly higher, despite a surprise jump in U.S. gasoline supplies, and a rally in dollar.

• Notably, Brent crude futures rose 0.3%, while U.S. West Texas Intermediate crude futures settled 0.09% higher.
• Early in the session, oil prices fell after the EIA reported a 3.6 million barrel jump in the US crude oil stocks last week.
• Gasoline demand in the country last week was down 3.6% from a year ago to around 8.9 million barrels a day.
• Product supplied for motor gasoline, a proxy for demand, fell by about 417,000 barrels per day last week, to 8.97 million bpd.
• The four-week average for demand is about 2% under last year's levels.
• As a result, stocks of the fuel rose unexpectedly even as refiners cut back output.
• U.S. gasoline stocks rose by 2.7 million barrels.
• However, investors worried that a potential expansion of the Gaza war could disrupt crude supplies from the Middle East.
• Cross-border strains between Israel and Lebanon's Hezbollah have been escalating in recent weeks.
• Turkish President Tayyip Erdogan said his country stood in solidarity with Lebanon and called on regional countries' support.
• Houthi attacks on shipping in the Red Sea have supported oil prices.

This morning, oil prices dipped.

• Notably, Brent crude oil futures were down 0.1%, as of 0635 GMT, while U.S. West Texas Intermediate crude futures dropped 0.1%.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London rose, on the back of higher rates for capesize vessels.

• Notably, the overall index gained 1.9%.
• The capesize index climbed 5.2%, marking its highest level since May 10.
• The panamax index fell about 3%, hitting its lowest level since April 11.
• The supramax index was steady.

Equity markets

U.S. stock indexes posted modest gains.

• The Dow Jones Industrial Average finished less than 0.1% higher, the S&P 500 index rose 0.2%, after drifting between small gains and losses most of the day, while the Nasdaq composite rose 0.5%.
• Several big stocks helped offset the broader decline in the S&P 500.
• FedEx helped offset the losses with a gain of 15.5%.
• Amazon .com rose 3.9%, surpassing $2 trillion in market value for the first time.
• Rivian soared 23.2%.
• Apple rose 2% and Microsoft gained 0.3%.
• Stock gains however were limited by higher bond yields after hawkish comments from Fed Governor Bowman pushed the 10-year T-note yield up +6.8 bp to a 1-1/2 week high of 4.316%.
• Meantime, US May new home sales fell -11.3% m/m to a 6-month low of 619,000.
• US MBA mortgage applications rose +0.8% in the week ended June 21.
• The purchase mortgage sub-index rose +1.2%, and the refinancing mortgage sub-index fell -0.1%.
• The average 30-year fixed rate mortgage fell -1 bp to 6.93% from 6.94%.
• In Europe, the Euro Stoxx 50 fell back from a 1-1/2 week high and closed down -0.41%.
• The German July GfK consumer confidence index unexpectedly fell -0.8 to -21.8.
• In China, the Shanghai Composite Index recovered from a 4-month low and closed up +0.76%.
• In Japan, the Nikkei Stock 225 Index climbed to a 2-1/2 month high and closed up +1.26%.

This morning, shares fell in most Asian markets.

• The Nikkei 225 index was down 0.8%, Hong Kong's Hang Seng fell 2%, the Shanghai composite index was down 0.6%, Australia's S&P/ASX 200 fell 0.3%, Taiwan's Taiex lost 0.4% and Bangkok's SET sank 0.7%.
• Shares rose in Mumbai, Jakarta and Singapore.
• The markets' big focus is on a U.S. government inflation report due Friday.
• Meantime, another set of measures to boost the Chinese property market failed to lift market sentiment.
• Japanese officials have warned they may intervene in the market to counter their currency trend, which has both positive and negative effects on the economy.

Currency trading

The dollar index rose, rallying to an 8-week high.

• Hawkish comments from Fed Governor Bowman pushed bond yields higher, boosting the dollar.
• A slump in the yen also supported the dollar.
• However, the dollar fell back from its best levels after US May new home sales fell more than expected to a 6-month low.

• The EUR/USD fell, with the euro tumbling to an 8-week low.
• An unexpected decline in the German July GfK consumer confidence index was bearish for the euro.
• In addition, dovish comments from Governing Council member Rehn undercut the euro.
• Finally, political uncertainty in France is weighing on the euro.
• On the other hand, the USD/JPY rose, with the yen sinking to a 37-year low against the dollar.
• Negative real yields in Japan, a sluggish Japanese economy, and massive government debt weighed on the yen.
• Losses however were limited by speculation that Japanese authorities could intervene at any time in the forex market to prop up the yen.
• Also, higher Japanese government bond yields supported the yen after the 10-year JGB bond yield rose to a 2-week high of 1.034%.

This morning, the U.S. dollar was trading at 160.35 yen in early trading, its lowest level since 1986. The euro rose to $1.0696 from $1.0681.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Jul contract was down 0.4c/bu to 541.2c/bu;
• Kansas wheat Jul contract was up 4c/bu to 580c/bu;
• Minneapolis wheat Jul contract was up 0.2c/bu to 596c/bu;

• MATIF wheat Sep was up €2.5/t to €223.5/t;

• ASX wheat Jul contract was up A$0.5/t to A$346/t;

• US DWI Cash (durum wheat index) was down 3.18c/bu to 709.09c/bu;

• 1CWAD (Canadian durum) avg spot price was down C$1.45/t to C$351.33/t.
• EDW (EU durum) Sep contract was down €6/t to €328/t;

• Chicago corn Jul contract was down 5.4/bu to 420c/bu;

• MATIF corn Aug was up €1.25/t to €209.25/t;

• Chicago soybeans Jul was down 0.4c/bu to 1162.6c/bu;
• Winnipeg canola Jul contract was up C$6.9/t to C$591.3/t;

• MATIF rapeseed Aug was up €9.5/t to €469.75/t;

• Brent crude Aug was up US$0.24/barrel to $85.25;
• WTI crude Aug was up US$0.07/barrel to $80.90;

• BADI (Baltic Dry Index) was up 38 points to 1.964;

• Dow Jones was up 15,64 points to 39.127,80;
• S&P 500 was up 8,60 points to 5.477,90;
• NASDAQ Composite was up 87,5 points to 17.805,16;
• US dollar index (Sep '24) was up 0.455 points to 105.714;

• AUD/USD firmer at US$0.6648;
• USD/CAD firmer at $1.3700;
• EUR/USD weaker at $1.0680;
• USD/RUB firmer at ?88.2250.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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