March 25, 2024 - Newswires

Wheat prices showed impressive strength on Friday ...

Good morning, Farmer Family ...

US farm markets were mixed but mostly lower, on Friday.

Corn prices eased 0.34%.

Soybeans slid 1.61%.

The rest of the soy complex also was in the red as soymeal moved 1.51% lower, while soyoil tumbled 2.36%.

Wheat prices grabbed variable gains, as Chicago SRW rose 1.46%, Kansas City HRW moved 1.5% higher, while Minneapolis spring wheat picked up 0.69%.

• Soybeans fell below $12 a bushel, after a two-session climb, which put the benchmark contract neared a two-month high.
• The rally, however, spurred soy sales by U.S. and South American farmers.
• Corn prices ticked lower in choppy trade, on a round of technical selling that was partly spurred by spillover weakness from soybeans.
• Others attributed market pressure to forecasts for beneficial rains in portions of the Midwest crop belt ahead of spring planting.
• Rains and snow were forecast in Iowa, a top producer of corn and soybeans, where nearly 20% of the state is in extreme drought, the latest weekly U.S. Drought Monitor report showed.
• Meantime, a surge in dollar, added to the bearish sentiment.
• On the other hand, the USDA confirmed a private sales of 263,000 metric tons of U.S. corn to Mexico.
• The EPA reported on Thursday that the U.S. generated 1.21 billion ethanol blending credits in February, which was steady with January’s volume of 1.21 billion.
• The U.S. also generated 732 million biodiesel blending credits last month, which was moderately above January’s volume of 675 million.
• The Mississippi River is once again at risk for barge ship bottlenecks due to dry spring weather and low winter snowpack that will limit the amount of water feeding into the system, according to NOAA.
• Low flows “could have potential impacts on those navigation and commercial interests that depend on water” according to Ed Clark, the director of NOAA’s National Water Center.
• Wheat, on its part, staged an impressive rally, in light of the strong U.S. dollar index, and firmed on short-covering, following a purge of bad news.
• European wheat prices surged on renewed concerns about disruption to Black Sea supplies given rising tensions between Russia and Ukraine.
• The European Commission proposed imposing tariffs on imports of grain from Russia and Belarus, although traders stressed that Russian and Belarusian shipments to the bloc are low relative to those from Ukraine, and that the imposition of tariffs was largely symbolic.
• Also, wire sources said the 2nd largest Russian grain exporter “RIF”, apparently have several vessels stuck at load ports in Russia unable to get phytosanitary certificates issued.
• Meantime, grain markets are gearing up for end of month, end of quarter and the USDA Prospective Plantings and Quarterly Stocks reports.
• That could lead to some volatility to end March.

In this context ...

• Corn basis bids trended 5 cents higher at a Nebraska elevator and 5 cents higher at an Indiana ethanol plant while holding steady elsewhere across the central U.S..
• Soybean basis bids eased a penny lower at an Ohio elevator and dropped 2 cents at an Illinois river terminal while holding steady elsewhere across the central U.S..
• For wheat, basis values finished the week mixed, as wheat futures markets experienced an uptick. The HRS basis decreased in the Gulf and Lakes but remained unchanged in the PNW. Since the beginning of 2024, MGEX futures have been on a downward trend, which has put pressure on FOB cash prices. Moreover, the new crop HRS basis weakened compared to the nearby values. HRW basis increased in the Gulf and held steady in the PNW. New crop basis values continue to decrease relative to nearby levels. Following recent inquiries, SRW basis and SW prices have rebounded from the previous week's lows.
• Commodity funds were net buyers in CBOT wheat contracts, and net sellers in corn, soybean, soymeal and soyoil contracts.

For the week ...

• Corn clawed back some of the week prior’s weakness, with May closing with a +0.57% Friday/Friday move.
• Soybeans pressed pause on the rally, with Friday weakness erasing any gains for the week, and closing down -0.48%.
• Soymeal tried to provide some support during the week, with a 1.31% gain.
• Soyoil, however, was the drag on the market, down 3.60%.
• The wheat market found some upward momentum, as all three exchanges were double digits higher.
• Chicago led the bull charge, with a 4.97% nice gain.
• Kansas City was not far behind, clawing back all last week’s losses and rallying 4.28%.
• Minneapolis spring wheat settled 2.24% higher on the week.

After the sessions close, the CFTC report showed large speculators trimmed their net short position in Chicago Board of Trade corn futures in the week to March 19. The report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and trimmed their net short position in soybeans.

This morning ...

• Chicago wheat prices rose to a three-week high, amid concerns over the French crop and tensions in the Black Sea, although ample supply kept prices near multi-year lows. Soybean and corn prices fell slightly.
• Notably, the most-active wheat contract on the Chicago Board of Trade was up 0.4%, by 0231 GMT, soybeans were down 0.2%, and corn fell 0.2%.
• Wheat prices, along with soybeans and corn, are exposed to short-covering rallies after speculators built up their biggest net short position in years.
• Money managers, indeed, have been covering short positions in CBOT grains/oilseeds during March, mostly in corn, soyoil and soybeans, and not last in wheat on Friday.
• However, speculative views remain historically bearish on the whole.
• Analysts estimate that U.S. farmers will plant more soybeans and less corn and wheat this season than in the previous one.
• However, the wheat market has been amply supplied by Russia, which has seen two consecutive large harvests and expects a third this year.
• Heavy rainfall that battered Argentina at the start of this month should ease up in the coming weeks, the Rosario Stock Exchange said, which could help crops recover.
• The corn market is well supplied from large US ending stocks and South American crops.
• The U.S. dollar held near last week's one-month high, making U.S. farm products less attractive to importers.
• Meantime, this week’s shortened schedule begins with the weekly Export Inspections report in the afternoon.
• NASS also will release their monthly Cold Storage report, overnight.
• On Wednesday, EIA will release the weekly ethanol stocks and production report.
• Thursday will be a busy one as we round out the week, month, and quarter beginning with the weekly Export Sales report.
• USDA will release their quarterly Grain Stocks and annual Planting Intentions report.
• The quarterly Hogs & Pigs report also will be out overnight.
• The markets will take a day off at the end of the week in observation of Good Friday.

Canada

Canada

Wheat prices across the Canadian Prairies grabbed variable gains during the week ending March 22.

• Canadian Western Red Spring (CWRS) wheat prices were up C$8.86 to C$9.20 per tonne.
• Average prices were ranged from C$300.94/tonne in southeast Saskatchewan to C$322.79 in southern Alberta.
• Canadian Prairie Red Spring (CPRS) prices were up C$13.68 to C$15.84/tonne.
• The lowest average bid for CPRS was C$262.13 in southeast Saskatchewan, while the highest average bid was C$285.33 in northern Alberta.
• The average prices for Canada Western Amber Durum (CWAD) were up C$3.75 to C$9.86 per tonne with bids between C$394.5 in southern Alberta to C$404.54 in west Manitoba.

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

• Common wheat deliveries into the handling system during the week ending March 17, 2024, were at 565,9k mt, with durum at 63,3k mt as well.
• Canadian wheat exports for shipping weeks 33 came in at 515,1k mt, for a total of 13.520,8k mt YTD.
• Durum wheat exports were at 135,7k mt, for a total of 2.183,5k mt YTD.
• Commercial stocks stood at 2.468,6k mt for common wheat, and at 559.2k mt for durum.

South America

Argentina

Buenos Aires Grain Exchange reported that for the week ending 20 Mar, 2023-24 maize harvest was 4pc complete.

• Crop conditions were rated 79pc fair/excellent.
• Fieldwork in the central and southern growing regions was hampered by heavy rainfall.
• Production forecast cut by 2.5Mt, to 54.0Mt, reflecting earlier hot conditions and incidences of disease and pest infestation in later sown crops in the centre and north.
• Sunflower seed harvest estimated at 59pc complete, with conditions rated 71pc fair/excellent.
• Production was cut by 0.2Mt, to 3.6Mt, on hot and dry conditions during critical crop development stages.
• Soybean crop conditions were rated at 84pc fair/excellent, with just over one-third of the crop in the grain filling stage with optimal moisture conditions.
• Meantime, according to the Rosario Stock Exchange, heavy rainfall that battered Argentina at the start of this month should ease up in the coming weeks.
• That could help crops recover and farmers harvest their plants as soil begins to dry.

Europe

European grain markets rose.

• Wheat prices jumped 3.75%, while corn moved 2.25% higher.
• Conversely, rapeseed closed down on the back of profit-taking at the end of the week, following a strong weekly rise of up to €20/t in the near term.
• Russia intensified their strikes on Odesa region, renewing concerns about disruption to Black Sea supplies.
• A smaller EU harvest is expected this year, after rain hit planting.
• Some 66% of French soft wheat was rated as in good or excellent condition by March 18, which remained stable from a week earlier but dropped from 94% a year ago, farm office FranceAgriMer said.
• 2024-25 durum planting was 93pc complete and spring barley 48pc complete.
• Durum wheat crop was rated 72pc good/excellent, and winter barley at 68pc.
• European farmers across the EU continued to protest the impact of cheap Ukrainian goods flowing across the border into the EU, in addition to recent “green” farm policies implemented by the European Commission.
• Low-priced grain from Ukraine continued to displace European origins, is impacting producers' profitability.
• In this context, the European Commission proposed, imposing tariffs on imports of grain from Russia and Belarus, though only 2% of Russian wheat shipments flow to Europe.
• On the other hand, on international market Russian exports have left European wheat dependent on sales to Morocco and China, due its noncompetitive prices.
• Russia has eroded the EU’s presence in major markets like Algeria and Saudi Arabia, also capturing market share from Ukraine as the war has shifted more Ukrainian grain towards Europe.
• As a result, the European Commission forecasts that EU common wheat exports in 2023/24 will fall 5% year on year to 31 million tons, despite higher supply this season.
• However, with this new proposal from the European Commission, European Union wheat exporters may facing a still slower end to the season.
• Thus, European grain prices, may have to fall again to win fresh demand, after a rebound from three-year lows, although slow selling by farmers, unhappy about their income, could curb export flows.
• Supporting prices, during the second half of the session, wire sources reported that the 2nd largest Russian grain exporter “RIF”, apparently have several vessels stuck at load ports in Russia unable to get phytosanitary certificates issued.
• The sharp fall in the euro/dollar exchange rate to 1.0802, its lowest level since the beginning of March, also provided support for European prices.
• However, this rising in prices, coupled with burgeoning Black Sea supply will remain a curb on EU shipments.

North Africa

The prices of unsubsidized bread do not need to increase after flour prices fell to EGP 16,000 this March from EGP 26,000, Minister of Supply and Internal Trade Ali Moselhy told Asharq Business.

• Moselhy added that the bakeries division did not submit a request to increase the prices of unsubsidized bread.
• The minister’s remarks follow the latest comments made by the spokesperson of the bakeries division, confirming that prices of unsubsidized bread would rise by 20% to 25% this week due to the increase in diesel and sesame prices.
• The Egyptian government, embodied in the General Authority for Supply Commodities (GASC), announced that it will bear the increase in the cost of producing subsidized bread loaves at bakeries using diesel and natural gas in the baking process.

Ukraine

As of March 21, Ukraine planted spring grains and pulses on 214.5 thsd ha, which is 3.8% of the planned amount, the agriculture ministry said on Friday.

• Of these, 29,000 ha are planted with wheat (11.8%), 117,300 ha with barley (14.3%), 53,100 ha with peas (33.2%), and 10,600 ha - oats (6.5%).
• The central Kyiv region has also started sowing sunflower seeds, the ministry added.

Russia

Russian farmers say they are considering reducing wheat acreage in favour of higher-margin crops like soybeans and peas as low global prices, rising input costs and continued export duties cut into harvests’ profitability.

• Russia expects a bumper grain harvest of 147 million tons in 2024.
• Analysts said they did not see potential cuts as a significant threat to the 2024 crop, in which higher-yielding winter wheat plays a key role.
• On this wake, SovEcon raised their outlook for 24/25 wheat output by 400k MT to 94 MMT citing an easy winter with below average winterkill.
• Winter wheat production was pegged at 68.2Mt, and spring wheat at 25.7Mt.?
• However, data from state statistics service Rosstat cited by Russia’s grain union showed the profitability of grain production falling to 23.9% last year from roughly 70% in 2022.
• The profitability of wheat fell to minus 0.9% compared to more than 70% in 2022, data showed.
• Spring wheat profitability is likely to be zero or negative, while winter wheat profitability may average about 15%.
• Prices for domestic third-class wheat fell to 11,500 roubles ($125.57) per ton a week earlier from 12,500 roubles ($136.49) at the beginning of the year, according to Sovecon.
• Export prices from the Russian Black Sea port of Novorossiysk fell from $242 a ton FOB in mid-January to below $200 in early March, according to IKAR agriculture consultancy.
• Thus, the low wheat prices are putting a strain on farmers.
• On this wake, Sovecon estimated the pre-harvest crop of spring wheat has fallen by 0.1 million hectares to 13.0 million as farmers try to switch from wheat to other crops.
• However, Russian agriculture minister Dmitry Patrushev said on Thursday this year’s spring sowing campaign is proceeding about twice as fast as last year.
• Meantime, the Ministry also has announced it will decrease grain export duties to lower the burden on grain producers.
• In other news, according to wire sources, the 2nd largest Russian grain exporter “RIF”, the export partner of GTCS/ GrainFlower, apparently have several vessels stuck at load ports in Russia unable to get phytosanitary certificates issued.
• Rosselkhoznadzor has issued a warning regarding the quarantine and phytosanitary conditions of some Russian grain export shipments.
• This may result in significant shipping delays.

Southeast Asia

Malaysia

Malaysian palm oil prices fell, to mark its first weekly loss in five.

• The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange ticked down 1.46%, hitting the lowest close since March 13.
• The contract lost 2.33% for the week, its first weekly decline since Feb. 23.
• The market is in a “consolidation mode” after a general uptick in prices since early March, which was”basically premised on supply constraints both in Malaysia and Indonesia, analysts said.
• Meanwhile, lower edible and crude oil prices added to the decline.
• Dalian’s most-active soyoil contract decreased 1.06%, while its palm oil contract lost 1.1%.
• Soyoil prices on the Chicago Board of Trade fell 2.36%.
• On the other hand, expectations of higher Indonesian tax and levy in April will likely keep prices supportive.
• Also, the Malaysian ringgit, weakened 0.47% against the dollar.

Australia

The WA wheat market closed higher at the end of last week.

• Exporter demand continued for Kwinana port zone, with levels for APW1 increasing to A$370/t FIS, H2 to $380/t and H1 $390/t.
• The other port zones are currently bid at levels around $10/t under Kwinana.
• Feed barley levels eased across the week to $335/t FIS for Kwinana & Albany ports, and $345/t for Maxi1.
• Canola (CAN) values firmed to $690 – $700/t range FIS Kwinana, Albany & Esperance.
• New season canola (CAN) remained just above $700/t FIS, and new season wheat remained around $355/t FIS Kwinana.
• In the Eastern States, current crop canola values took a bit of a breather on Friday, back $5/t across the board.
• It has been a quite an impressive move over the past 1 month, with Vic canola port values moving from $580/t to $650/t.
• Port Kembla is currently pricing a $10/t premium.

International grain and oilseed tenders & trade

• No available news.

Outside markets ...

Energy markets

Oil prices slipped, and were flat on the week.

• Brent futures for May delivery settled down 0.41%, while U.S. crude settled down 0.54%.
• Both benchmarks logged less a than 1% change on the week.
• The possibility of a ceasefire in Gaza weakened crude benchmarks.
• The U.S. dollar was set for a second week of broad gains after the Swiss National Bank's surprise interest rate cut on Thursday bolstered global risk sentiment.
• A stronger dollar makes oil more expensive for investors holding other currencies, dampening demand.
• Meanwhile the conflict in Eastern Europe kept oil prices from moving lower.
• The U.S. oil rig count fell by one to 509 during the week, according to Baker Hughes data, indicating lower future supply.
• Also the potential for easing U.S. interest rates, helped support prices.
• After the sessions close, the CFTC report showed money managers upped their net long U.S. crude futures and options positions last week, with combined futures and options positions in New York and London rising by 57,394 contracts to 202,624.

This morning, oil prices rose in Asian trading, on concerns over tighter global supply brought about by escalating conflicts in the Middle East and between Russia and Ukraine, while a shrinking U.S. rig count added to upward price pressure.

• Notably, Brent crude futures climbed 0.5%, at 0759 GMT, while U.S. crude futures gained 0.5%.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London fell, snapping a six-week-long winning streak, weighed down by a dip in rates for the larger capesize and panamax vessel segments.

• The overall index fell 2%.
• The index declined by 7.8% for the week.
• The capesize index lost about 3%.
• It slipped 14.3% for the week.
• The panamax index was down by 1.8%, logging a weekly decline of about 3%.
• The supramax index rose 0.29%.
• It gained 4.3% for the week, a was up for the seventh straight week.

Equity markets

US stock indexes settled mixed, consolidating below Thursday’s record highs.

• The Dow Jones Industrial Average fell 0.8%, the S&P 500 slipped 0.1%, while the Nasdaq composite rose 0.2%.
• Lululemon Athletica closed down more than -15.8%, Nike closed down -6.9%, Reddit fell 8.8%, Tesla closed down more than -1%.
• Meantime, the 10-year US T-note yield fell -4.59 bp to 4.212218%, supporting some stocks.
• FedEx closed up +7.4%, while Nvidia closed up more than +3%.
• For the week, the S&P 500 gained 2.3% in its biggest weekly percentage advance since mid-December.
• The Dow climbed 2%, also its biggest weekly gain since mid-December, while the Nasdaq rose 2.9%, its biggest weekly percentage jump since mid-January.
• In Europe, the Euro Stoxx 50 closed down -0.42%.
• The German Mar IFO business climate survey rose +2.1 to 87.8.
• The German Jan import price index was unchanged m/m and fell -5.9% y/y.
• In China, the Shanghai Composite closed down -0.95%.
• In Japan, the Nikkei Stock Index rallied to a new record high and closed up +0.18%.
• The Japan Feb national CPI rose +2.8% y/y.
• The Feb national CPI ex-fresh food and energy rose +3.2% y/y, the smallest increase in 13 months.

This morning, Asian shares were trading mixed.

• Japan's Nikkei 225 shed 1.2%, Hong Kong’s Hang Seng climbed 0.2%, the Shanghai Composite gained 0.3%, Australia's S&P/ASX 200 rose 0.5%, South Korea's Kospi lost 0.2%.
• A top Japanese finance official expressed reservations about the recent surge in the U.S. dollar against the Japanese yen, fueling speculation about possible intervention in the market.
• The Chinese yuan fell to a four-month low of 7.2282 to the U.S. dollar.

Currency trading

The dollar index rose, posting a 5-week high.

• The EUR/USD fell to a 3-week low, on dovish comments from ECB Governing Council member and Bundesbank President Nagel, in spite the euro saw some support from news that the German Mar IFO business climate index rose to a 9-month high.
• The GBP/USD slid to a 5-week low, supporting the dollar.
• Also, the Chinese yuan tumbled to a 4-month low against the dollar.
• Chinese authorities set a weaker-than-expected daily fixing, fueling speculation they would tolerate further losses in the currency.
• Friday’s decline in US T-note yields however capped gains for the dollar.
• The USD/JPY fell, with the yen recovering from a 4-1/4 month low against the dollar.
• There were speculations Japan could soon intervene in the forex market in support of the yen after comments from Japanese Finance Minister Suzuki.

This morning, The dollar rose at 151.23 yen, up from 151.41 yen. The euro cost $1.0818, up from $1.0810.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat May contract was up 8c/bu to 554.6c/bu;
• Kansas wheat May contract was up 8.6c/bu to 590.4c/bu;
• Minneapolis wheat May contract was up 4.4c/bu to 661c/bu;
• MATIF wheat May contract, was up €7.5/t to €207.25/t;
• ASX wheat May contract was down A$4.5/t to A$325/t;
• Black Sea wheat has not quoted since August 11, 2023;
• US DWI Cash (durum wheat index), was down 1.62c/bu to 753.68c/bu;
• 1CWAD (Canadian durum) avg spot prices was up C$4.11/t to $399.62/t;
• EDW (EU durum) May contract was unchanaged to €336/t;
• Chicago corn May was down 1.4c/bu to 439.2c/bu;
• MATIF corn Jun was up €4.25/t to €193.5/t;
• Chicago soybeans May down 19.4c/bu to 1192.4c/bu;
• Winnipeg canola May was down C$8.4/t to C$634.5/t;
• MATIF rapeseed May contract, was down €0.5/t to €448.25/t;
• Brent crude May was down US$0.35 to $85.43;
• WTI crude May was down US$0.44 per barrel to $80.63;
• BADI (Baltic Dry Index) was down 44 point to 2.196;
• Dow Jones was down 305.47 points to 39.475,90;
• S&P 500 was down 7.35 points to 5.234,18;
• NASDAQ Composite up 26.98 points to 16.428,82;
• US dollar index (Jun '24) was up 0.511 points to 104.177;
• AUD/USD weaker at US$0.6513;
• USD/CAD firmer at $1.3604;
• EUR/USD weaker at $1.0807;
• USD/RUB firmer at ?92.1295.

"To the people of Russia, and particularly to the community of Moscow:

We are profoundly saddened by the devastating attack that took place at the Crocus City Hall in Moscow.

This is a senseless act of violence which brought to the loss of innocent lives.

Therefore we extend our heartfelt condolences to all the families who are grieving.

May the memories of those lost be a beacon of strength and unity against such atrocities all around the world.

People are looking for prosperity, solidarity, love, support, and peace.

Please stop wars!!"

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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