May 24, 2024 -Newswires

Grain markets mixed, but mostly higher …

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"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 morning, Farmer Family ...

US farm markets were mixed but mostly higher on Thursday.

Corn prices moved 0.6% higher.

Soybeans slid 0.56%.

The rest of the soy complex also was in the red, as soymeal fell 0.4%, while soyoil slumped 1.5%.

Wheat prices, meantime, managed moderate gains, with Chicago SRW rising 0.72%, Kansas City HRW jumping 1.61%, and Minneapolis spring wheat gaining 1.02%.

• Wheat prices extended gains, after reaching a 10-month peak a day earlier, as lingering dryness and worries over the Black Sea crop continued to underpin the market.
• However, some traders said it looks like the market is losing momentum.
• Corn prices were supported by doubts over South American production.
• Also, the recent surge in wheat prices increased its premium over corn, encouraging some profit-taking in wheat, and shifting demand to corn.
• Soy slipped on technical trading.
• The soybean harvest in Brazil may also be curbed by flooding in the far south, though national production is set to remain high.
• Faster-than-expected planting progress in the United States is keeping a lid on corn and soybean prices, supporting expectations of ample global supply for both crops.
• Meantime, the International Grains Council (IGC) in its monthly update, cut its forecast for 2024/25 global wheat production, with the outlook for key Black Sea producers Russia and Ukraine downgraded.
• The IGC also cut its forecast for global corn (maize) production in 2024/25.
• Conversely, the update numbers showed world bean production rising slightly.
• On the demand side, US export sales of old-crop corn for the week ending May 16 were in line with analyst estimates, while new-crop U.S. wheat and old-crop U.S. soy export sales fell on the low end of analyst estimates.
• Notably, the USDA pegged a 4-week high in corn bookings at 911,151 MT during the week of May 16.
• That was 22.8% above the previous week.
• New crop sales came in at 304,952 MT, the second highest for the MY.
• For soybeans, the report?showed 279,402 MT of soybeans booked in the week that ended on May 16.
• New crop sales were still weak at 65,500 MT.
• Soybean meal sales were below the estimates, with 23/24 bookings at 145,315 MT in that week and 51,437 MT for 24/25 sales.
• Soybean oil sales were at net reductions of 1,041 MT for 23/24 and 4,038 MT for 24/25 sales.
• For wheat, all wheat export sales for the 23/24 MY were just 17,852 MT as there are just 2 weeks left in the MY.
• Sales for the 24/25 crop were on the low end of the estimates during the week of 5/16 at 224,860 MT.
• That was a 5-week low.

In this context ...

• Basis bids for soybeans were mostly steady to firmer at U.S. Midwest river terminals and processors, despite an uptick in farmer sales of the oilseed as Chicago Board of Trade July futures touched a four-month high.
• Notably, the soybean basis strengthened by 10 cents a bushel at a Sioux City, Iowa, processing site and by 7 cents near Davenport, Iowa, where grain is loaded onto barges for shipment on the Mississippi River toward U.S. Gulf exporters.
• For corn, basis bids were steady to mixed.
• In particular, the corn basis firmed by 6 cents at Davenport and by 1 cent at an elevator in Council Bluffs, Iowa. But the basis fell by a penny at Blair, Nebraska, site of a large processor, where the basis had firmed by 14 cents over the last week.

• Commodity funds were net buyers of CBOT wheat and corn contracts, and net sellers of soybean, soyoil, and soymeal.

This morning ...

Chicago wheat prices gained more ground. Corn and soybeans also strengthened.

• Notably, the most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.7%, as of 0242 GMT, taking the weekly gain in prices to nearly 8%.
• Corn added 0.4% and soybeans rose 0.1%.
• For the week, corn has risen 2.9% while soybeans were up more than 1%.

Canada

Canadian Pacific Kansas City (CPKC) said talks with the Teamsters Rail Conference Union have hit a deadlock, predicting that a legal strike or a lockout would not likely occur before mid-July.

• In a statement posted on the company's website late on Wednesday, CPKC said the two sides had met from May 15 to 21 with the aid of federal mediators.
• "Regrettably, and despite our best efforts, no progress was made. Additional bargaining dates have not been scheduled at this time," it said.

South America

Brazil

Soy farmers in Brazil's southernmost state have now harvested 91% of their soy area, Emater said.

• That was up from 85% last week.
• Despite some progress, soybean farmers still lag the 97% historical average for the period, Emater said.
• Bad weather has also impacted the delivery of the freshly harvested soybeans to drying and storage units, where some grains arrived with humidity of nearly 30%, Emater said.
• Meantime, corn harvesting advanced 4% compared to the previous week, reaching 92% of cultivated area.
• However, the corn that remains to be harvested has started to show signs of disease, Emater said.
• Emater also noted 10% of Rio Grande do Sul's rice remains on the fields, down from 14% last week.
• Meantime, freight operators reduced projected Brazilian soybean exports for the month to 13.83 MMT from an earlier 14.13 MMT.
• They shipped about 4% more in May 2023, but this would still be a larger quantity than the US has ever shipped in a single month.

Argentina

The share of Argentine corn in good to excellent condition was 51%, compared to 54% the previous week and 47% a year earlier, according to the Buenos Aires Grain Exchange.

According to BAGE, Agrentina’s corn harvest is 28% complete.

Europe

European grain market ended mixed once again.

• September wheat was down 0.39% at 258.25 euros ($279.30) per metric ton.
• Corn prices for the 2023 harvest showed a stronger decline falling by €6.25/t to €211.75/t, after the recent highs.
• In oilseeds, firmness has been confirmed with prices increasing and returning to their highest levels in 10 months, as the August 2024 deadline goes back above €490/t.
• Wheat fell, moving away from a 10-month peak as the market assessed rain chances for parched crops in top exporter Russia while monitoring damp conditions in western Europe.
• The surge in wheat prices has swelled their premium over corn, encouraging some profit-taking as traders anticipated some livestock feed demand shifting towards corn.
• Spanish buyers this week booked 110,000 tons of U.S. corn in a possible sign of this shift.
• The International Grains Council cut sharply its outlook for Russian production.
• There was also concern about downpours in France and Germany, after heavy rain already disrupted the growing season.
• However, damage from the latest rain in Germany may be limited to the south.
• Export demand for wheat remained thin after the price rally.
• In France, wheat export loadings were limited, with barley shipments to China again providing main volumes for cereal exports, data compiled by LSEG showed.
• Also, Spanish feed makers said they can currently buy corn at about 214 euros a ton for nearby delivery to Spain including shipping (CIF), at least 10 euros a ton cheaper than EU feed wheat.

North Africa

Egypt’s government has procured more than 2.99 MMT of local wheat so far, putting it well on its way of reaching its target of 3.5 MMT.

Ukraine

Ukraine's grain exports in the 2023/24 July-June marketing season had reached 45.4 million metric tons by May 24, exceeding the previous season level of 44.6 million tons, agriculture ministry data showed on Friday.

• This season's exports included almost 4 million tons so far in May, the data showed.
• The overall exports included 16.9 million tons of wheat, almost 25.6 million tons of corn and 2.4 million tons of barley.

Russia

In its weekly update of the 2024/25 Consensus Forecasts, the Russian Grain Union showed that wheat production is expected at 86.6 MMT, down 0.2% from a week earlier.

• Barley production is expected at 19.3 MMT, corn at 15.3 MMT, both unchanged from a week earlier.
• Meanwhile other grains are expected to reach 13 MMT, down 0.8% from the previous week.
• As for export, forecasts see wheat exports from Russia at 46.7 MMT, down 0.4% from a week earlier.
• Barley exports are seen at 4.3 MMT, corn exports at 5.3 MMT both unchanged from the previous week.
• Meanwhile other grain exports, are seen at 2.4 MMT, down 7.7% from a week earlier.
• On the weather side, according to the Roshydromet, in the third decade of May in BlackEarth zone, and especially in South of Russia, the tension of agro-meteorological conditions due to drought will increase.

Southeast Asia

Malaysia

Malaysian palm oil prices extended gains on Friday due to the weakness of the Malaysian ringgit and expectations of improved demand after the prices of rival soft oils rallied more than palm oil this week.

• Notably, the benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 0.54%, at 3,915 ringgit ($829.98) a metric ton by mid-day break.
• Soyoil, sunflower oil and rapeseed oil prices jumped this week on production concerns.
• Malaysian ringgit depreciated significantly this week, which is also helping exporters to increase prices.
• Exports would improve in coming weeks from Malaysia and Indonesia.
• However, Malaysian palm oil exports for May 1-20 fell between 8.3% and 9.6% from the month before, according to cargo surveyors.

Australia

WA current crop wheat values have risen again to the November 2023 early harvest levels, most of the lift in offshore futures has been added to local bids and the Australian wheat balance sheet continues to tighten.

• Kwinana APW1 has traded up to A$420/t FIS, H2 about $428/t FIS and H1 about $440/t.
• WA new season canola (CAN) bids have now lifted to $820/t FIS, and new season APW1 MG wheat bids strengthened to $430/t FIS.
• Feed barley MG bids have also improved to $355/t FIS.
• Current crop APW1 Geelong has increased more than $65/t since March and CAN increased more than $120/t since April lows.
• SNSW corn values have rallied recently on stockfeed demand.
• Meantime, ASX Jan 2025 wheat was unchanged at $400/t, while ASX Jan 2025 barley up $8/t to $345.50/t.

International grain and oilseed tenders & trade

• No available news.

IGC - May 2024 Update

The International Grains Council (IGC) cut its forecast for 2024/25 global wheat production, with the outlook for key Black Sea producers Russia and Ukraine downgraded.

• Notably, the inter-governmental body, in its monthly update, trimmed its 2024/25 world wheat crop outlook by 3 million metric tons to 795 million tons.
• Russia was forecast to have a crop of 85.5 million tons, down from a previous projection of 90.4 million.
• Ukraine's production outlook was trimmed to 23.7 million from 24.5 million.
• However, the IGC predicted world wheat feed use will fall by almost 8Mt.
• Total consumption was also cut by 2 MMT, with the ending stock projection up 1 MMT from last month at 260 MMT, but still a 6 MMT reduction from last year.
• For corn the IGC cut its forecast for global corn (maize) production in 2024/25 by 6 million tons to 1.22 billion tons with the outlook for the crop in Argentina downgraded.
• Argentina's corn crop was seen at 54 million tons, down from a previous projection of 60 million.
• Mixed with a 2 MMT increase in consumption took the ending stocks number fown 10 MMT from the April Projection to 281 MMT.
• For soybean, the International Grains Council numbers showed world bean production up 1 MMT to 414 MMT from the previous month.
• Consumption remained the same, with stocks up 3 MMT to 78 MMT on higher carry over from the previous MY.
• In this context, IGC reduced its 2024/25 world grain ending stock forecast to 580Mt.
• That was 12Mt lower than previous month forecast and represent a multi-year stock decline.
• Stock held among the major exporters at the end of 2024/25 were forecast 142Mt vs 146Mt in 2023/24.

Outside markets ...

Energy markets

Oil prices fell for a fourth consecutive session, and settled at multi-month lows.

• Brent crude futures settled 0.7% lower, the lowest since January.
• U.S. West Texas Intermediate (WTI) crude futures fell 0.9%, hitting a three-month low.
• The prospect of higher-for-longer U.S. interest rates raised worries around oil demand growth in the US.
• Also weighing on the market, U.S. crude stocks rose by 1.8 million barrels last week.
• However, the EIA reported U.S. gasoline demand at its highest since November, providing some support for energy markets, ahead of the Memorial Day holiday weekend, which is considered the start of the U.S. summer driving season.
• U.S. gasoline consumption makes up around 9% of global oil demand.
• Investors are also looking ahead to the June 1 meeting of the OPEC+, where the group will decide its output policy.

This morning, oil prices were stable.

• Brent crude futures rose 0.06% by 0640 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 0.03%.
• Brent futures were headed for a weekly decline of more than 3%, and WTI futures were poised for a slide of nearly 4% from last week.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London edged lower.

• The overall index fell 0.44%.
• The capesize index was steady.
• The panamax index gained about 0.05%.
• The supramax index fell 1.90%.

Equity markets

US stock indexes settled moderately lower.

• The Dow Jones Industrial Average dropped 1.5%, the S&P 500 fell 0.7%, and the Nasdaq composite slipped 0.4%.
• Stock indexes initially had moved higher, as Nvidia surged more than +9% after reporting stronger-than-expected quarterly earnings.
• However, US weekly initial unemployment claims fell -8,00 to 215,000.
• The US May S&P manufacturing PMI unexpectedly rose +0.9 to 50.9.
• US Apr new home sales fell -4.7% m/m to 634,000.
• As a result, the 10-year T-note yield rose +4.9 bp to 4.471%.
• Meantime, the US May Kansas City Fed manufacturing activity survey rose 6 to a 5-month high of -2.
• The US Apr Chicago Fed national activity index fell -0.19 to -0.23.
• In Europe, the Euro Stoxx 50 closed up +0.25%.
• The Eurozone May consumer confidence index rose +0.4 to a 2-1/4 year high of -14.3.
• The ECB reported that Eurozone negotiated wages in Q1 increased +4.7% y/y from +4.5% y/y in Q4 and matched a record.
• The Eurozone May S&P manufacturing PMI rose +1.7 to a 15-month high of 47.4.
• The May S&P composite PMI rose +0.6 to 52.3, the fastest pace of expansion in a year.
• In China, the the Shanghai Composite Index fell to a 3-week low and closed down -1.33%.
• In Japan, the Nikkei Stock Index closed up +1.26%.?
• Japan Apr machine tool orders were revised upward to -8.9% y/y from the previously reported -11.6% y/y.
• The Japan May Jibun Bank manufacturing PMI rose +0.9 to 50.5, the fastest pace of expansion in a year.

This morning, Asian shares were mostly lower.

• Japan's Nikkei 225 index lost 1.2%, the Hang Seng in Hong Kong fell 0.4%, South Korea's Kospi declined 1.2%, in Australia, the S&P/ASX 200 shed 0.9%, Taiwan's Taiex slipped 0.2%.

Currency trading

The dollar index rose, hitting a 1-week high.

• Better-than-expected US economic reports bolstered the outlook for the Fed to delay interest rate cuts further.
• Weekly US jobless claims fell more than expected.
• The May S&P manufacturing PMI unexpectedly increased.
• The dollar extended its advance when stocks gave up an early rally and turned lower, sparking liquidity demand for the dollar.
• Meantime, the EUR/USD fell to a 1-week low, in spite the euro initially moved higher on stronger-than-expected reports, about Eurozone Q1 wages and the Eurozone May S&P manufacturing PMI.
• The USD/JPY rose, with the yen falling to a 3-week low against the dollar, although the yen initially had posted modest gains on stronger-than-expected Japanese economic reports on May Jibun Bank manufacturing PMI and Apr machine tool orders.

This morning, the U.S. dollar rose to 157.05 Japanese yen, up from 156.96. The euro fell to $1.813 from $1.0817.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Jul contract was up 5c/bu to 698c/bu;
• Kansas wheat Jul contract was up 11.2c/bu to 710.6c/bu;
• Minneapolis wheat Jul contract was up 7.4c/bu to 744c/bu;

• MATIF wheat Sep was down €1/t to €258.25/t;

• ASX wheat Jul contract was down A$3 to A$382/t;
• US DWI Cash (durum wheat index), was unchanged to 768c/bu;
• 1CWAD (Canadian durum) avg spot prices was down C$2.39/t to C$386.91/t;
• EDW (EU durum) Sep contract was down €8/t to €345/t;

• Chicago corn Jul was up 2.6c/bu to 464c/bu;

• MATIF corn Jun was down €6.25/t to €211.75/t;

• Chicago soybeans Jul down 7c/bu to 1239.2c/bu;
• Winnipeg canola Jul contract was up C$6.4/t to C$672/t;

• MATIF rapeseed Aug was up €7/t to €495/t;

• Brent crude Jul was down US$0.54 to $81.36;
• WTI crude Jul was down US$0.70 per barrel to $76.87;

• BADI (Baltic Dry Index) was down 8 points to 1.796;

• Dow Jones was down 605.78 points to 39.065,26;
• S&P 500 was down 39.17 points to 5.267,84;
• NASDAQ Composite down 65.51 points to 16.736,03;

• US dollar index (Jun '24) was up 0.200 points to 105.036;

• AUD/USD weaker at US$0.6606;
• USD/CAD firmer at $1.3729;
• EUR/USD weaker at $1.0815;
• USD/RUB firmer at ?91.6134.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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