LAST WEEK MARKET COMMENT

Good morning Farmer Family …

US farm markets ended mixed on Friday.

Soybean rose for the third consecutive day, closing 0.63% higher.

Soymeal led the way higher posting 1.91% gains.?

Soybean oil price, however, ended the day 1.15% in the red.

Corn prices were 0.95% firmer in the end week session.

Wheat prices were weaker across all the board, meantime.

Chicago SRW, indeed, was 0.56% lower at the bell, posting the weakest price since September of 2021.?

Kansas City HRW was also red on Friday, settling 1.18% lower.?

Minneapolis spring wheat went home with 0.4% losses.?

Soybean was supported by expectations that the Argentine’s soy crop will be smaller than estimated.

Most people believe that the next WASDE report is going to show a huge cut in the Argentinian soybean crop.

In this context, soymeal surged, spurred by an increasing US domestic demand.

The soyoil market, meantime, likely was curbed by lackluster renewable diesel production targets laid out by the EPA.

The corn market rebounded, as it had been technically oversold, after the most-active contract sank to its lowest since August on Wednesday.

This bounce also fueled optimism that international buyers may return to U.S. supplies, especially as concerns mount about timing issues for Brazil’s second corn crop and drought stress for Argentina’s corn crop.

Wheat prices were weaker, as ther e were more hopes that grain exports from Ukraine’s Black Sea ports will continue to be shipped even amid concerns about the renewal of the deal with Russia that is set to expire March 18.

Also, a rapid Russian shipping paces cotinued to keep a lid on international wheat prices, increasing demand concerns.?

Kansas City wheat took the biggest price hit,?as precipitations came in some of the most drought-stressed regions of the Plains.

Heavy showers and thunderstorms has blanket a large portion of the Heartland, stretching from the Southern Plains to New England.?

Areas of Illinois, Indiana, and Ohio saw a staggering volume of rain – up to four inches of accumulation along the Ohio River Valley.

Sunday there were snow showers in the Northern Plains that creepped into the Upper Midwest by early Monday morning.

NOAA’s 6 to 10-day outlook is trending cooler than usual for the entire country.?

Chances for precipitation late this week are trending lower, but still above normal volumes.

In this context, wheat losses were limited by a heat wave currently tearing through India.

Meantime, traders were staking out their positions ahead of WASDE report that will be released on March 8.

For the week, corn prices eased the pain thanks the late week strength, but were still down 1.46% since the prior Friday.

Soybeans had sharp weakness early the week and entered in recovery mode from Wednesday on.

However, that wasn’t anough, as the contract closed down 0.03% on the week.?

Meal prices helped again closing 0.27% higher.?

Bean oil was down 0.05%, meantime.?

As for wheat, markets spent the last half of the week trying to recover early losses.

However, they were still lower at the end of the week, as Chicago SRW posted a 1.8% weekly drop, Kansas City led the way to the downside, with 2.27% weekly losses, and Minneapolis spring wheat which was firmer, slipped just 1.1% lower over the week.

The USDA crop progress report on Monday had 2023-24 winter wheat crop conditions at 27 Feb mixed.?

Kansas was rated 19pc good/excellent, Colorado 29pc, Oklahoma 36pc, Illinois 82pc, Montana 21pc, Nebraska 19pc, North Dakota 46pc, and South Dakota 23pc.

On Wedsneday the EIA indicated ethanol moved lower in the week ending February 24.

The U.S. Environmental Protection Agency, approved the petition for year-round sales of E15 for 8/9 states, but it will be effective in 2024.?

The monthly Grain Crush data from NASS showed corn used for ethanol production during January 4.3% above December’s crush.

However, that was 4.3% under last year’s corn draw.?

NASS reported soybeans processed in January was a 2% boost from December’s crush, but was still down 1.6% from Jan last year.?

The USDA set the guarantees, which act as a floor price below which farmers with insurance can receive payments, at $5.91 per bushel for corn, $13.76 a bushel for soybeans.?

Those guarantee prices for the 2023 growing season are the highest since 2011 for corn and the second-highest on record for soybeans after last year’s peak.

As for wheat, the insurance guarantee for spring wheat was $8.87, down from $9.19 a year ago.

On Thursday, Weekly Export Sales report showed export demand for U.S. grains has slumped.

Corn bookings were at a 7-week low in the week that ended on Feb 23.?

Old crop corn export commitments (shipped and unshipped sales) were down 39% vs. last year.?

As for soybean, the report had old crop soybean export bookings at a marketing year low.?

Commitments were 3% below last year at this time, although still 4% faster than the average pace.?

As for wheat, Weekly Export Sales data indicated bookings slipping below prior week, posting total wheat export commitments now a 7% below year ago, and shipments 5% back of the average pace.

In this context, on Friday, commodity funds were net sellers in 1,000 lots of wheat and net buyers in 3,500 lots of corn and 5,000 lots of soybeans.

After the sessions close, Commitment of Traders data were also reporting, though still delayed three weeks.?

For the week ending February 7, indeed, the spec funds trimmed 17,906 contracts from their corn net long, as they had 202,018 contracts net long and the commercials 399,749 contracts net short.?

As for soybean, CFTC reported that the large spec funds trimmed 10,429 contracts from their net soybean long in the week ending February 7.?

That put them net long 165,075 contracts at that time.

The commercials were adding hedges at the time, shown 203,823 contracts net short.?

As for wheat, CFTC data showed Chicago wheat specs adding another 7,763 contracts to their net short as of 2/7.?

That put them, 71,391 contracts net short.

Money managers were adding 2,443 contracts to their net long in KC wheat, putting them 3,782 contracts net long.

For spring wheat, the spec traders were shown at 295 contracts net short.

Meanwhile, corn basis was flat but strong for this time of year.?

Bearish is however the fact that with just weeks to go before planting, there are few serious concerns about moisture in U.S. corn growing areas.?

An impending large crop will keep downward pressure on the market, but proof will not come until the crop is planted and well under development.

As for wheat, basis was down across all wheat classes and export points past week, as relatively quiet demand and lack of farmer engagement provided little insulation from the week’s drop in futures prices.?

Steadfast buyers from the Pacific Northwest helped support PNW demand, though softened elevations, cheaper interior rail freight, and decreased exports weighed on the market.?

On this morning, Chicago wheat prices lost more ground, weighed down by expectations that Ukraine Grain deal will be extended.

Soybeans slid for the first time in four sessions while corn eased, although losses in both markets were limited by forecasts of lower production in Argentina.

Notably, the most-active wheat contract on the Chicago Board of Trade gave up 0.7% to $7.03-3/4 a bushel as of 03:23 GMT.?

Soybeans fell 0.2% to $15.15-3/4 a bushel and corn gave up 0.2% to $6.38-1/4 a bushel.

Turkish Foreign Minister Mevlut Cavusoglu said on Sunday that Ankara is working hard to extend the U.N.-backed initiative.

Ukraine sees no need to limit wheat exports for the 2023/24 July-June season as the winter harvest looks to be larger than expected.

A consortium of Argentine agricultural companies said on Friday they had slashed their forecasts for this season's soybean and corn harvests, warning that the cost for the country could be more than $20 billion.

Meanwhile, China will aim to boost its grain production capacity by 50 million tonnes in 2023.

In energy markets, oil prices recovered from a brief sell-off to gain by more $1 per barrel on Friday and ended the week higher.

Brent crude futures indeed rose $1.08, or 1.3%, to settle at $85.83 a barrel.?

U.S. West Texas Intermediate (WTI) crude futures settled at $79.68 a barrel, up by $1.52, or 1.9%.?

Both benchmarks posted their highest closing levels since Feb. 13.

Brent and WTI notched their third biggest weekly percentage gains this year as strong Chinese economic data fed hopes for oil demand growth.

China’s service sector activity in February expanded at the fastest pace in six months, and manufacturing activity there also grew.?

China’s seaborne imports of Russian oil are set to hit a record high this month.

Also, the dollar weakened, and analysts expect the greenback to be under pressure over the next 12 months, which would make dollar-denominated oil cheaper for holders of other currencies.

Meantime, the European Central Bank interest rate could climb as high as 4% if inflation remains high.

Oil prices had dropped early the session by more than $2 per barrel after a media report said the UAE had held internal debates on leaving OPEC and pumping more oil.?

However, prices rebounded when some sources said the report was “far from the truth”.

On this morning, oil prices slipped after China set a lower-than-expected target for economic growth this year at around 5%, and as investors cautiously awaited U.S. Federal Reserve Chair Jerome Powell's testimony this week.

Thus, Brent crude futures were trading down 53 cents, or 0.6%, at $85.30 a barrel at 07:35 GMT.?

U.S. West Texas Intermediate (WTI) crude futures were also down 0.6% at $79.21.

Premier Li Keqiang said on Sunday the foundation for stable growth in China needed to be consolidated, insufficient demand remained a pronounced problem, and the expectations of private investors and businesses were unstable.

The United States Federal Reserve's Chair Jerome Powell will testify to Congress on Tuesday and Wednesday, where he will likely be quizzed on whether larger hikes are needed in the world's largest oil consuming country.

The United States' future rate hikes are also likely to depend on what the February payrolls report reveals on Friday, followed by the February inflation report due next week.

In ocean freight markets, the Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, climbed to a two-month peak on Friday, as well as marked its second straight weekly rise, supported by improving demand for capesize and panamax vessel segments.

The overall index, indeed, rose 66 points, or 5.8%, to 1,211, its highest since Jan. 3.

The main index rose about 37.2% for the week.

Notably, the capesize index rose 195 points, or 19.5%, to its highest in more than six weeks, at 1,195.?

It was up about 88% for the week.

Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, increased $1,614 to $9,910.

The panamax index, up for the ninth straight session, gained 9 points at 1,565. It was up about 23% for the week.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, were up $81 at $14,087.

Among smaller vessels, the supramax index fell 3 points to 1,189.

In equity markets, US stock indexes Friday settled moderately higher.

A decline in bond yields Friday supported the rally in technology stocks as the 10-year T-note yield fell -9.1 bp to 3.965%.?

Bond yields fell back on carryover support from Thursday when Atlanta Fed President Bostic said the Fed could be in a position to pause rate hikes by mid to late summer.?

Also, market sentiment improved, when data showed the China Feb Caixin services PMI rose +2.1 to 55.0, stronger than expectations of 54.5 and the fastest pace of expansion in 6 months.

That sparked a rally in the Shanghai Composite to a 7-1/2 month high Friday and provided carryover support to world equity markets.?

Positive corporate news Friday also gave the overall market a boost.??

Cooper Cos closed up more than +7%.??

Apple closed up more than +3%.

Broadcom closed up more than +5%

Friday’s U.S. news showed Feb ISM services index fell -0.1 to 55.1, stronger than expectations of 54.5.

In this context, Wall Street rallied on Friday to end a volatile week.

All three major U.S. stock indexes surged more than 1%, with the tech-laden Nasdaq climbing close to 2%.

Notably, the Dow Jones Industrial Average rose 387.4 points, or 1.17%, to 33,390.97, the S&P 500 gained 64.29 points, or 1.61%, to 4,045.64 and the Nasdaq Composite added 226.02 points, or 1.97%, to 11,689.01.

For the week, the indexes notched gains, with the S&P snapping a three-week losing streak and the Dow, returning to positive territory year-to-date, enjoyed its first weekly advance since late January.

In Asian trading Monday, Hong Kong's Hang Seng index rose 0.2% to 20,603.19 and the Shanghai Composite index lost 0.2% to 3,322.03.

Tokyo's Nikkei 225 gained 1.1% to 28,237.78 and the Kospi in Seoul added 1.3% to 2,462.62.?

The S&P/ASX 200 in Australia added 0.6% to 7,328.60.?

India's Sensex climbed 0.9% to 60,324.58 and shares rose in Taiwan.?

Thailand's markets were closed for a national holiday.

In currency trading, the U.S. dollar slid from a 2-1/2-month high versus the Japanese yen on Friday.

That was its largest weekly loss since mid-January against a basket of six major currencies.

Traders, indeed, stepped back to gauge the path for Federal Reserve policy.

The dollar index , indeed, fell 0.3% to 104.60, from as high as 105.36 at the start of the week, its strongest level since Jan. 6.?

For the week, the index slid 0.5%, its biggest percentage fall since the week of Jan. 15.

Notably, the dollar eased 0.65% to 135.88 yen , after climbing to 137.10 on Thursday, the highest since Dec. 20.?

The euro rose 0.38% to $1.0636, after starting the week at a nearly two-month low of $1.0533.

Sterling rose 0.84% against the dollar to $1.2041, for a 0.54% gain on the week, its best weekly performance since Jan. 20.?

The pound’s gains came as Britain struck a post-Brexit Northern Ireland trade deal with the European Union, while a survey showed Britain’s services sector grew at the fastest pace in eight months in February.

On this morning, the dollar fell to 135.91 Japanese yen.?

The euro rose to $1.0646.

Going back to analyzing the other agricultural markets …

From Canada, the Canadian Grain Commission’s January Exports of Canadian Grain and Wheat Flour report, which tracks exports through licensed facilities, highlighed a year-over-year increase in export volumes as well as an expanded list of countries grain has been shipped to in the August through January period.?

This varies from crop to crop.

Notably, the CGC data shows the year-over-year change in licensed exports of wheat at 68.7% as of the end of January.

This also involved shipping to 52 countries reported by the CGC, up from 33 over the same period of 2021-22.?

That is by far the largest year-over-year increase seen for the crops shown.

Of the 52 countries shipped wheat over this six-month period, only 14 destinations have seen a year-over-year decline in the volume shipped, while exports have expanded over the balance of these countries.?

In addition, the volume shipped to the largest destinations has surged higher, with the volume shipped to China up 253% and the volume to Indonesia up 61%.

Among other crops, Durum exports through licensed facilities are up 108.8% from the same period in 2021-22, canola is up 26.9%, soybeans up 14.9%, peas up 51.8%, corn up 20.7% and lentil exports are up 93.6%, which includes movement through bulk facilities only.

Over the same period, the number of countries shipped durum has increased by six, the number of countries shipped peas has increased by three and the number of countries shipped lentils has increased by one.

The number of countries shipped soybeans has fallen by two and the number of countries shipped corn has fallen by two from the same period in 2021-22.

Despite a 26.9% increase in the canola volume reported as exports in the first six months, the number of countries reported by the CGC to be shipped canola over this period of the crop year is steady at 10.?

Of these 10 nations, only four have seen exports increase year over year, largely due to a 181% increase in volumes shipped to China, where the 2.2793 mmt shipped to China accounts for 52.4% of all exports, limiting availability for competing nations.

Meantime, the Grain Statistics weekly report, had producers’ deliveries of common wheat at 304,7k mt for week 30 of this shipping season.

That was sharply weaker from 566,7k mt posted prior week.?

Deliveries of durum wheat, were at 75,0k mt, also clearly weaker from 130,3k mt showed in prior week.

Canada exported 396,2k mt of common wheat in week 30.

That was up from 312,0k mt of a week earlier.

Durum wheat exports, were also higher moving up from 105,6k mt to 137,3k mt.?

Total Commercial Stocks of common wheat stood at 3.040,7k mt.

That was down from 3.063,6k mt posted in week 29.

Total durum commercial stocks, were also weaker moving from 652,9k mt a week earlier, to 545,7k mt.?

Cumulative exports for common wheat were at 11.351,4k mt.

That is compared 6.867,0k mt a year ago.

Durum cumulative exports reached 3.202,1k mt vs 1.458,2 a year ago.

In this context, cash bids for Canadian durum wheat slightly rose week over week, as the average regional price was at C$459.88/mt as of March 3.

That was C$0.89/mt increase from the prior week.

From South America, Brazil has become the second country in the world after Argentina to approve the cultivation of genetically modified wheat, following a decision by the nation’s biosecurity agency CTNbio.

Brazil plants about 3 million hectares with wheat, mostly in southern states like Rio Grande do Sul and Parana.

Sowing drought-resistant wheat may be appealing to farmers in that region.

In November 2021, Brazil became the first country in the world to allow imports of flour made with GM wheat.

This year, Brazil is expected to harvest 10.5 million tonnes of wheat, according to the Conab, which pegged domestic wheat consumption at 12.4 million tonnes.

According to AGrural, 43% of the soybean acreage in Brazil is harvested and 70% of corn planted i.e., down 10 points from last year to date.?

Ahead of the March WASDE reports, the trade average guess is to drop corn output by 100k MT, but the range of estimates is between -3 MMT and +5 MMT.?

Private firm Agroconsult estimates Brazil’s corn crop to total 128.5 MMT, which includes a 29.4 MMT 1st crop and a 99.1 MMT 2nd crop.?

Datagro has their 2nd crop estimate at 102.91 MMT.?

As for soybean, the trade is expecting a 100k MT trim on average, but individual respondents carry a +/- 2MMT range.?

USDA’s attaché, has Brazil’s soybean output at 153 MMT, steady with USDA’s official forecast.?

The USDA also have slightly higher exports and slightly lower crush for the balance sheet, ultimately leading Brazil’s carryout to 3.221 MMT relative to the official 2.855 MMT forecast.?

Agroconsult expects Brazil’s soybean crop to total 153 MMT, steady with their prior assumption.?

Datagro has 150.81 MMT penciled in for soybean output.

Meantime, Brazil’s agriculture ministry said on Friday that 90 local firms have been cleared to export corn to China in the first two months of the year, taking the total to 446.

The information comes as Brazil forecasts its corn exports to reach a fresh record this year, potentially beating the volume shipped by the United States, according to a statement.

In other news, a confirmed case of mad cow disease in Brazil discovered on Feb. 20, triggered an automatic ban on Brazilian beef sales to China.

Earlier on Thursday, three additional Asian markets – Thailand, Iran and Jordan – slapped temporarily bans on beef imported from anywhere in Brazil.

Russian authorities also halted Brazilian beef imports, but only from Para state, according to an earlier statement from the ministry.

Brazil’s ministry of agriculture and livestock emphasized that it aims to re-establish beef exports “as soon as possible.”

The suspension on exports represents a major risk for Brazil’s key livestock sector, one of the world’s largest.

In Argentina, the Buenos Aires grains exchange said on Thursday it plans to cut again its estimate for Argentina’s corn and soybean crops for the 2022/23 cycle.

The exchange did not give further details about the size of the new cut.?

In its weekly crop report, the exchange said a week of dry, hot weather continued to affect crops as 62.2% of planted areas are in a period critical to their development.

The Exchange has reported for the week ending 1 Mar, 2022-23 maize conditions were rated 44pc fair/excellent (49pc previous week, 76pc previous year).

Soybean conditions were rated 33pc fair/excellent (40pc previous week, 77pc previous year).

Thus, “this scenario will affect our current production estimate,” it said.

Ahead of the March WASDE report, analysts are looking for USDA to trim 3.6 MMT off the Argentina corn crop, to 43.4 MMT on average.?

The full range expects at least a 1 MMT cut, with as much as a 6 MMT reduction.?

As for soybean, analysts are looking for USDA to cut the Argentina soybean production estimate 4.4 MMT to 36.7 MMT on average.?

The full range of estimates going in is from -1 MMT to -9 MMT.?

It should to note, that despite below average rainfall, the BAGE projection for 2022-23 sorghum production was maintained at 3.3Mt (3.5Mt last year).

However, according to a private firm, the cost for the country could be more than $20 billion, this marketing year.

In Europe, European wheat fell again past week, still pressured by poor export prospects.

Meanwhile there is strong short-term demand for feed barley, the bases of which have been clearly progressing.

Indeed, though Morocco imported 293,298 t of common wheat in February, including 172,219 t from France, 110,079 t from Germany and 10,999 t from Lithuania, the cheap wheat from Russia and other Black Sea suppliers is expected to cover upcoming import demand in the Middle East and North Africa.

Traders were awaiting more news about the extension of Ukraine’s safe shipping channel for grain exports which expires on March 19.

However, cheap sales offers for Ukrainian wheat continued to be made also on Wednesday for shipment after the expiry of the shipping agreement.

Just for exemple, a seller was offering up to 30,000 tonnes of Ukrainian 11.5% protein wheat for March 15-April 15 shipment from Ukrainian ports in the shipping corridor at about $280 a tonne FOB.

Meantime, standard 12% protein wheat for March delivery in Hamburg was offered for sale at a premium of about 6-7 euros over the Euronext May contract, with little purchase interest.

On the supply side, Refinitiv Commodities Research revised up its EU 2023-24 common wheat production forecast by 0.1Mt, to 133.9Mt (126.0Mt previous year) reflecting a higher area estimate for France.?

Its rapeseed production number was raised by 0.2Mt, to 20.6Mt (19.6Mt previous year).?

It noted that due to a generally warmer winter, crops are reportedly in good condition.?

During February, temperatures were mostly above average.?

While there were good rains in some parts, including Germany and northeastern Europe, limited precipitation was noted in some southern and western regions.?

Although dryness concerns was noted in France, soil moisture level were currently sufficient for dormant crops.?

On this wake, according to FranceAgriMer, the condition of soft wheat in the week to Feb. 27 was unchanged from the previous week, in a sign that the dry February weather had not taken a toll on crops.

An estimated 95% of soft wheat crops rated to be in good or excellent condition by Monday, above the 93% registered a year earlier.

For winter barley, 93% of the crop was rated good or excellent, down from 94% from the previous week, while durum fell to 91% from 92%.

The dry conditions eased spring barley sowings which are almost over with 92% of the expected area planted by Feb. 27 compared with 80% a week earlier and an average 42% over the previous five years, FranceAgriMer’s data showed.

In other news, France on Friday moved to support its agri-food sector, which is suffering from high costs and struggling to compete on world markets, including by launching a 500 million euro ($531 million) fund open to private investors.

Agri-food is the leading industry in France with a turnover of 198 billion euros, according to a joint statement by the industry and agriculture ministries.

The state will provide 200 million euros of the total fund with the rest open to investment funds and strategic investors, Industry Minister Roland Lescure told reporters, adding that the investment strategy would be laid out in the coming weeks.

“The objective is not to nationalise the French agri-food industry but to support private partners who will help us to push the sector forward,” Lescure said.

The scheme aims to provide development capital to small- and medium-sized businesses, including for investment in factory automation and agro-ecology as well as support for consolidation within the sector to improve competitiveness.

The government hopes to be able to gather investment commitments in the coming weeks, Lescure said.

The plan also includes the possibility for companies to defer social and tax charges and training for export managers to help penetrate new international markets.

From Ukraine, Ukraine’s 23/24 spring season is underway.

The Ag Ministry reported 3,500 HA of spring grains were planted.?

Meantime, Ukraine’s First Deputy Farm Minister reported there were no plans to curb 2023-24 wheat exports based on the current supply outlook.?

With evidence of larger than previously anticipated plantings in southern areas, 2023-24 wheat area was forecast up by around 0.3m ha from Oct, to 4.1m ha, with production provisionally seen at around 16-18Mt.

Refinitiv Commodities Research left the Ukraine 2023-24 wheat production forecast unchanged at 22.3Mt (incl. in uncontrolled territories).?

Production excluding non-occupied regions was forecast at 18.2Mt.?

Rapeseed production (incl. in uncontrolled territories) projection was broadly unchanged, at 3.5Mt.?

Production excluding non-occupied regions was seen at 2.9Mt.?

Weather conditions during February were mostly favourable, with precipitation recorded across the country except in the southern central oblasts, where rainfall was below average.?

Temperatures were mostly above average.

Meantime, the export corridor deal which set to expire on March 19th, likely will be extend, though Russian Foreign Minister Sergei Lavrov said continuation of the agreement would only be possible if the interests of Russian agricultural and fertiliser producers, in terms of unhindered access to world markets, will be take into account.

Ukraine is seeking a 1 year extension.?

Ukraine’s total grain exports reached 5.2 million metric tons in February, which was slightly down than year-ago totals.?

The data showed that overall grain exports so far for the 2022/23 season were down 26.6% at 32.9 million tonnes.

The volume so far in the July to June season included about 11.4 million tonnes of wheat, 19.1 million tonnes of corn and about 2.1 million tonnes of barley.?

The ministry said grain exports so far in March had reached 641,000 tonnes as of March 6, down from 1.33 million tonnes in the same period last year.

Also, delays in inspecting cargos at Istanbul have been a major issue due to demurrage costs.?

From Russia, Sovecon said on Wednesday that it had lowered its 2023 Russian wheat crop forecast to 85.3 million tonnes from 86 million tonnes due to challenging winter weather conditions.

However, Russia’s agriculture ministry will not revise its grain export quotas for the current season, the Interfax news agency reported.

It added that Russia’s grain export target for the whole season is about 60 million tonnes.

Russian wheat prices have dropped below the $300.00/MT FOB mark for the first time in 18 months, with some sources pegging Russian wheat as low as $296.00/MT FOB.?

The decrease in Russian prices may signal a downward trend in wheat prices worldwide as harvest approaches, while ending stocks in Russia are forecast to increase by 30% to 14.4 MMT after a record harvest.

Meantime, the Russian agriculture ministry revised the export tax for wheat, corn and barley.

Particularly, as of Mar 9, the export duty on wheat will increase to 5,371.6 from 5,275.2 rubles per ton a week earlier.

Ditto for corn, rised from 2264.6 rubles of a week earlier, to 2,740.0 rubles per ton.

For barley, in contrast, the duty will be easer for this period, decreasing to 3,548.8 rubles from 3,872.3 rubles per ton a week earlier.

This new duty rates will be in effect through Mar 14, inclusive.

The duties were calculated based on indicative prices: $303.2 per ton for wheat ($302.2 a week earlier), $252.5 for barley ($261.1), $237.1 for corn ($230.2).

From the Middle Kingdom, China will aim to boost its grain production capacity by 50 million tonnes in 2023, Premier Li Keqiang said on Sunday, while also building storage centres in suburban areas for emergency supplies of daily necessities.

China is aiming to shore up its food security amid heightened geopolitical risks, which could threaten its heavy reliance on imports of animal feed grains like soybeans.

From South East Asia, Malaysian palm oil prices rose on Friday to clock a fourth straight weekly rise.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange, indeed, advanced 63 ringgit, or 1.47%, to 4,357 ringgit ($974.07) a tonne, its highest closing since Nov. 8.

For the week, palm rose 3.7%.

Crude palm oil production in Malaysia was reported at 1.28 MMT, down 7.2% yr/yr for February.?

Malaysia’s palm oil inventories at the end of February are forecast to shrink 2.7% from the month before to 2.21 million tonnes as production, hampered by heavy rains, tumbled to a one-year low.

Output is expected to slump 8.65% to 1.26 million tonnes while export is seen up 0.3% to 1.14 million tonnes.

Also, India’s edible oil imports are forecast to climb to 15 million tonnes in the year to October 2023, up from 14.15 million tonnes shipped a year ago.

However, India’s February palm oil imports dropped 30% from January to their lowest in 8 months as refiners preferred to lower their stocks as inventories piled up following excessive imports during October-January.

The reduction in palm oil imports by India, the world’s biggest importer of vegetable oils, could weigh on Malaysian palm oil prices.

Notably, India’s palm oil imports fell to 586,000 tonnes last month, the lowest since June 2022, according to the average of the estimates from the five dealers.

Soyoil imports in February also eased 7.3% from January to 340,000 tonnes, while those of sunflower oil dropped 67% to 150,000 tonnes from record high imports in January, the dealers said.

Palm oil was struggling to compete last month as its discount to soyoil and sunflower oil shrank to around $200 per tonne from as high as $500 in the December quarter.

But India’s recent moves to discontinue duty free imports of sunflower oil and soyoil could support palm oil in coming months.

India on Wednesday, indeed, decided to scrap a duty-free import quota of 2 million tonnes of crude sunflower oil for the next fiscal year starting from April 1.

The move could lead to higher imports of palm oil, which was earlier attracting taxes even as imports of sunflower oil and soyoil were allowed without any taxes under the quota.?

On the other hand, a heatwave in northern and central India at a time the crop is ripening is threatening to damage grains and dent the country’s wheat production for the second straight year.

The reduction in production amid a drop in inventories to the lowest level in 6 years may force the world’s second biggest producer of the grain to allow imports after banning exports last year.

The maximum temperature in some wheat-growing areas jumped above 39 degrees Celsius for a few days in February, nearly 10 degrees Celsius above normal, according to weather department data.

Higher temperatures would lead to early maturity of the crop and grains could be shrivelled.

India last month estimated wheat production in 2023 could rebound to a record 112.2 million tonnes, but trade bodies are less optimistic due to the heatwave.

Higher temperatures in March can trim output by 4 to 5 million tonnes.?

Lower production would keep wheat prices above the government’s buying price and encourage farmers to sell to private players.

State purchases fell by 53% in 2022 to 18.8 million tonnes, pushing up local rates and forcing the government-backed Food Corporation of India (FCI) to release 5 million tonnes of the grain from its reserves to cool prices.

But the sales, which are ongoing, would halve the government’s stocks at the start of the April-March marketing year to 10.2 million tonnes, the lowest in six years, estimates USDA.

To replenish stocks, the government is aiming to procure about 34 million tonnes from farmers in 2023.

Thus, to safeguard local supplies, the Indian government has decided to keep the curbs on wheat exports.?

“Since the export ban is going to continue, we expect that there will be more wheat available for the public procurement,” Food Secretary Sanjeev Chopra said last week.?

He said there was no report of damage to the crop yet and was optimistic that output would rise to the official estimate of 112Mt.

From Australia, local markets closed the week slightly stronger on the day but overall, for the week, cereal prices finished close-to-unchanged.?

Canola also finished up $5/t on the day but was down $15/t for the week with offshore movements being mostly mirrored in local markets.?

Sorghum harvest continues, albeit with some small rainfall totals which slowed harvest for a day or so.?

The market continues to firm with any good quality grain being snapped up.?

Late rain on the later-sown crops is not likely to make any material difference to the quality and quantity, both of which have been slipping.

On the international trade scene, Turkeys State Grain Board reportedly purchased 465,000t feed barley, from the Black Sea region, at $276.00-$293.20/t c&f, for Mar-May shipment.?

Taiwan bought 65,000 t of corn from the American continent.?

Tunisia is buying 25,000 t of feed barley.

The UN Food and Agriculture Organisation (FAO) global food price index dropped for the 11th straight month in February and was 18.7pc below the March 2022 peak.?

The February decline was driven by a significant drop in the price of vegoils and dairy, along with small reductions in cereal grains and meat, which more than offset a steep rise in the price of sugar.?

Watching this week’s market

Monday starts with weekly Export Inspections data in the afternoon.?

Wednesday will be a little busier than normal, as the weekly EIA ethanol production and stocks report will be out per normal.?

The WAOB will also release the monthly WASDE report with NASS publishing the Cotton Ginnings report.?

Census Trade data will also be out that day.?

On Thursday we will see the release of the weekly Export Sales report.

That’s all, thank you.

We wish you a nice day and a good start to the week.

?Author: Sandro F. Puglisi

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