May 9, 2024 - Newswires

Corn, soybeans and wheat prices all ended lower …

Good afternoon, Farmer Family ...

US farm markets went into the red, on Wednesday.

Corn prices stumbled 1.82% lower.

Soybeans slumped 1.5%.

The rest of the soy complex also was in the red, as soymeal lost 1.23%, while soyoil fell 1.6%.

Wheat prices faced variable losses, as Chicago SRW dropped 1.36%, Kansas City HRW tumbled 2.33%, and Minneapolis spring wheat fell 2.26%.

• Corn ended lower, as farmers continued to sell off their old crop and Brazil faced continued flooding in grain producing regions.
• Some market participants are expecting bearish supply and demand numbers from the USDA on Friday.
• Also, Brazilian corn production will be plentiful, the chief executive of grain trader Cargill in the South American nation said.
• Meantime, weekly EIA data showed ethanol production at 965,000 barrels per day for the week that ended on May 3.
• That was a 22,000 bpd drop from the previous week.
• Stocks of ethanol were tallied at 24.2 million barrels, a sharp 1.288 million barrel draw on the week, mainly out of the Midwest region.
• Soybeans ended lower, despite flooding in Brazil's Rio Grande do Sul state continuing to disrupt harvest, on expectations the USDA report on Friday will show strong global supplies, while forecasts for drier weather in the U.S. Midwest are expected to allow for accelerated seeding.
• Meantime, Bloomberg reported that China is flooding the US with used cooking oil, that the biofuels industry says may be tainted.
• According to the US International Trade Commission, US imports of used cooking oil have more than tripled in 2023, with more than 50pc coming from China.
• In this context, US industry groups and biofuels executives are becoming increasingly worried that a significant amount of those supplies is fraudulent and are urging the government to tighten scrutiny on the imports.
• One of the biggest concerns is that Chinese exporters are adding used cooking oil to fresh palm oil.
• Wheat turned lower, as forecasts for rain are sneaking into much of the Southern Plains over the next week, which have remained dry so far this spring.
• Additional pressure came from forecasts of rain in drier parts of the Russian growing regions.
• Meanwhile, some market participants are anticipating the U.S. Department of Agriculture's May supply and demand and crop production reports on Friday to cast a bearish tone over the recent wheat futures rally.
• Grain and oilseed investors also are expecting USDA to report an increase in U.S. end-stocks of corn, wheat and soy in 2024-25, compared with the previous year.

• Meantime, grain traveling the US railways saw another 21,725 carloads on the move last week, bringing 2024 cumulative totals up to 369,758 carloads.
• That is 1.1% above last year’s pace so far.

In this context ...

• Corn basis bids were steady to mixed across the central U.S. after inching a penny higher at an Ohio elevator while sliding 2 cents lower at three other Midwestern locations.
• Soybean basis bids were steady to mixed after trending as much as 6 cents higher at an Illinois processor and as much as 5 cents lower at an Indiana processor.
• Commodity funds were net sellers in CBOT wheat, corn, soybean, soymeal, and soyoil contracts.

This morning ...

Wheat prices rose, as Russia declared a state of emergency in key grain-growing regions due to frosts, while corn and soybeans also edged up.

• Notably, the most-active wheat contract on the Chicago Board of Trade (CBOT) was up 1.7%, as of 1011 GMT, corn gained 0.55%, while soybeans rose 0.35%.
• Expectation that the U.S. Department of Agriculture's (USDA) May supply and demand and crop production reports due on Friday will show adequate supply limited the rebound.

South America

Brazil

Brazil will remain a competitive corn supplier in global markets thanks to yet another year of abundant production, Paulo Sousa, chief executive of grain trader Cargill in the country, said.

• Brazil's total corn production, however, will fall by nearly 21 million tons this season, though it is still expected to be large compared with what other countries are capable of producing.
• Last month, Conab pegged total national corn output at 111 million tons for the current cycle, 16% below the previous season as farmers reduced plantings for first corn and safrinha corn.
• According to Conab, Brazil will export 31 million metric tons of corn in the 2023/2024 season, much lower than in the previous one, when exports totaled nearly 55 million tons, setting a record.
• The USDA forecasts Brazil will export 52 million tons.
• Meantime, Brazil’s Anec estimates that the country’s corn exports will reach 548,640 t in May, which would be a year-over-year increase of 11.1%, if realized.
• Anec also estimates that the country’s soybean exports will reach 12.33 MMT in May, which would be a year-over-year decrease of 8.5%, if realized.
• Anec also expects to see Brazilian soymeal exports reach 2.34 million metric tons this month, versus 2.28 MMT last May.

Argentina

Argentina's Rosario grains exchange lowered its estimate for this season's corn harvest, citing theleafhopper insect which has heavily hit the crop.

• The leafhopper has ruined around 20% of the corn crop this season, according to the exchange.
• Meantime, they its harvest estimate to 47.5 million metric tons.
• Argentina's 2023/24 corn sowing area is seen at a record 8.89 million hectares, the exchange said.
• The exchange held its estimate for the current soybean harvest at 50.0 million tons, though it cautioned harvesting has been delayed by rains and high humidity.
• Meanwhile the 2024/25 wheat planting area should be "much higher" than the 6.9 million hectares in the 2021/22 cycle, which saw a record harvest, the exchange added.

Europe

European grain markets ended mixed.

• Wheat prices fell 0.62%, corn slumped 2.51%, while rapeseed moved 0.63% higher.
• Prices fell as rain was forecast for parched grain belts in southern Russia.
• Weaker US ag markets also weighed over prices, as good U.S. weather forecasts are weighing on Chicago prices.
• Meantime, in the latest wheat tender from Egypt, big volumes have been available quickly from Russia with the tender only announced late a night earlier.
• Also, the lowest offer presented was $255 per ton FOB for Russian supplies.
• That was below the lowest offer for French wheat of $266.00 a ton FOB.
• A reminder of low-price competition from Ukraine also came with news Ukrainian grain exports up to May 8 were almost equal to the volume exported last season.
• Traders, however, were cautious ahead of world supply/demand estimates on Friday from the U.S. Department of Agriculture, although it's expected to highlight plentiful global supplies.

North Africa

Egypt has procured 2.1 million tons of wheat in the local harvest so far this season, Kamal Hashem, chairman of the state-run General Company for Silos and Storage said on Thursday.

Ukraine

Ukraine's parliament has dismissed Agriculture Minister Mykola Solsky.

• Meantime, according to the State Customs Service, as of May 8, Ukraine exported 42.406 mln tonnes of grains and pulses since the beginning of 2023/24 MY, including 1.047 mln tonnes shipped in May.
• It is noted that as of the same date last year, the total shipments amounted to 42.647 mln tonnes, including 761 thsd tonnes in May.
• In total, since the beginning of the current season, have been exported wheat for 16.173 mln tonnes, barley for 2.23 mln tonnes, corn for 23.522 mln tonnes.
• The total export of Ukrainian flour since the beginning of the season as of May 8 is estimated at 87.8 thsd tonnes, including 83 thsd tonnes of wheat flour.

Russia

Three of Russia's key grain-growing areas declared a state of emergency on Wednesday, citing May frosts that have caused severe damage to crops and will reduce this year's harvest.

• The central regions of Lipetsk, Voronezh and Tambov all imposed emergency measures.
• "The frosts that hit in early May led to catastrophic consequences," Igor Artamonov, the governor of the Lipetsk region said.
• In neighbouring Voronezh, according to preliminary data, the area of dead or severely damaged crops has exceeded 265,000 hectares, the regional agriculture ministry said.
• In Tambov, further east, Governor Maksim Yegorov signed a similar order, with his administration citing "early May frosts that have killed crops and damaged perennial plantings".
• All three regions are part of Russia's fertile Black Earth region.
• Besides grain, the regions produce crops such as potatoes, sunflowers, sugar beet and fruit.
• The statements did not make clear how each of these crops might be affected by the frost.
• However, the air temperature had fallen to -4.6 Celsius (23.7 Fahrenheit) and the soil temperature to -5C (23F) on four nights.
• Some analysts have already reduced their forecasts for the 2024 grain harvest because of dry weather in the south, but the impact of the frosts has not yet been included in forecasts.
• In mid-April, the Agriculture Ministry said the 2024 grain harvest may drop to 132 million metric tons from 144.9 million tons in 2023.
• These regions are now facing a further wave of cold snaps that will affect the condition of crops after an early, warm spring.
• However, Russian regions hit by frosts will re-sow crops, state news agency TASS quoted the agriculture ministry as saying on Thursday.
• "The killed crops will be replanted, all necessary resources are available for this," TASS quoted the ministry of agriculture as saying.
• Meantime, SovEcon reported that as of 1 April, Russian wheat stocks were estimated at 27.5Mt, matching last year’s levels and exceeding the average by 65pc amid record-high on-farm wheat stocks in the south.
• Stocks in the south amount to 4.1Mt, up 8pc from last year.
• In the central Russia stocks, at 4Mt, are down 14pc, and in the Volga region, 3.2Mt (up 1pc).?

Middle-east

Iran will not import any wheat until March 2025 as it will rely on domestic production, the Iranian Student News Agency reported a deputy at the Agriculture Ministry saying on Thursday.

• "Between March 2023 and March 2024, domestic production of wheat has reached 10.5 million tons and we only needed to import 1 million tons of wheat," Alireza Mohajer said, adding that the country expects to be self-sufficient in the production of wheat for this year.

China

China has approved the safety of gene-edited wheat for the first time.

• The approval for the gene-edited disease-resistant wheat is seen as a milestone, as the ingredient - used to make pasta, noodles and bread - is predominantly grown in China for food consumption.
• China is the world's largest wheat producer and consumer.
• The agriculture ministry also approved a new variety of genetically modified corn with herbicide and insect-resistant traits, as well as one gene-edited corn variety that is higher yielding.
• The GM corn approval includes a variety by Origin Agritech.
• The safety certificates have been approved for five years from May 5, according to a document published by the Ministry of Agriculture and Rural Affairs.
• On this wake, Beijing is also expected to pass new rules this year for the labelling of genetically modified crops used in food products, state media reported in March.
• Meantime, China's soybean imports in April jumped 18% from a year earlier to 8.57 million metric tons, according to the General Administration of Customs, the highest on record for April as buyers snapped up cheap and plentiful Brazilian beans.

Southeast Asia

Malaysia

Malaysian palm oil prices ended a two-day winning streak to close lower.

• The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed down 1.55%.
• Weaker prices of rival soyoil and lingering worries around palm exports, weighed over the market.
• Dalian’s most-active soyoil contract dipped 0.13%, while its palm oil contract lost 0.24%.
• According to analysts, Malaysia’s April palm oil exports declined by 7.79% month-on-month to 1.22 million tons.
• Also, according to LSEG Weather Research, the onset of La Nina in the third quarter of 2024 could bring relief from drought risk, which is favourable for palms.

Australia

Alongside rapid progress in the sowing of eastern Australia’s winter crop, volume traded has picked up in the southern market, mostly from trading companies selling warehoused stock.

• In the north, trade has been thin as mostly ideal conditions for planting of the winter crop offset the impact of rain on the summer-crop harvest.
• Overall, prices have moved little, if at all, in the past week, although the southern market has seen some spikes created mostly by a shortage of farmer deliveries now that planting is in full swing.
• In this context, by the close yesterday, local markets had held the gains made after the previous day’s bounce.
• The ASX July 24 wheat contract ended the day unchanged at A$365/t, while the January 2025 contract ended down A$2/t to $380/t.
• ASX May 2024 barley also closed unchanged at $327/t, while the January 2025 contract, ended down $1.50/t to $330/t.
• Liquidity was better from the grower but certainly by no means a flood of grain being offered as growers continue with their winter sowing programs.
• Weekly rainfall totals in NSW of 15-50mm have been widespread, with central and northwest NSW picking up the higher end of the range.
• Southern growing regions have largely missed out again but there is another rainfall front coming through this weekend which could fill in the gaps.
• Southern WA has picked up another 5-50mm, with the higher totals in the lower south and southwest.
• SA and Vic had another dry week, but Vic has some rain on the forecast this weekend which will hopefully deliver.
• Southern Qld has 5-25mm forecast over the weekend after a relatively dry week.

International grain and oilseed tenders & trade

• South Korea’s Korea Feed Association (KFA) has issued an international tender to purchase up to 69,000 metric tons of animal feed corn to be sourced from optional origins. The deadline for submission of price offers in the tender from the KFA’s Busan section is also Thursday, May 9. The corn was sought in one consignment for arrival in South Korea around Aug. 10.
• Japan's Ministry of Agriculture Forestry and Fisheries (MAFF) bought 114,077 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.
• Egypt’s GASC has purchased 360kt of Russian wheat at US$278.43/t to $279.60/t c&f and 60kt of Romanian at $279.30/t. The Russian fob price was $255/t and the Romanian was $259.50/t. The last GASC tender in mid-April saw Russian fob at $230/t.
• The lowest offer presented at an Egyptian state purchasing tender for vegetable oils on Thursday was $1,010 per metric ton c&f for 5,000 tons of soyoil. The lowest offer presented for sunflower oil at the tender was $1,044 per metric ton c&f for 6,000 tons. Egypt's state grains buyer, the General Authority for Supply Commodities (GASC), is seeking vegetable oils in an international purchasing tender for arrival June 10-25 and/or June 26-July 10. GASC said traders should submit bids for payment via 180-day letters of credit. The deadline for offers was for today May 9.
• Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins. The deadline for submission of price offers in the tender is May 14. A new announcement had been anticipated by traders after Jordan made no purchase in its previous tender for 120,000 tons of wheat on Tuesday.
• Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley to be loaded by Aug. 31 and arrive in Japan by Oct. 31, via a simultaneous buy and sell (SBS) auction that will be held on May 15.

Outside markets ...

Energy markets

Oil prices edged higher.

• Notably, Brent crude oil futures settled 0.5% higher, while U.S. West Texas Intermediate crude futures rose 0.8%.
• Official data from EIA showed U.S. crude stockpiles fell last week as refiners slowly ramped up output ahead of the summer driving season.
• U.S. crude inventories fell by 1.4 million barrels to 459.5 million barrels.
• That was compared with a 1.1 million-barrel draw forecasted by analysts, and with a 509,000-barrel increase predicted by industry.
• Stockpiles fell as refinery activity increased by 307,000 barrels per day (bpd) in the period.
• Refinery utilization rates indeed rose by 1 percentage point to 88.5% of total capacity.
• This caused gasoline stocks to swell by more than 900,000 barrels to 228 million barrels, while distillate stockpiles including diesel and heating oil rose by 600,000 barrels to 116.4 million barrels.
• However, the rising in refinery utilization rates, was still lower than rates of 91% a year ago.
• Also, it should to note that we are approaching to the Memorial Day weekend at the end of May, that kicks off the peak season for gasoline demand, meanwhile, the demand is still below 9 million barrels (per day).
• Meantime a stronger dollar capped gains, as well as, hopes of a ceasefire in Gaza have put some downward pressure on oil prices.

This morning, oil prices rose.

• Notably, Brent crude futures for July rose 0.3%, by 0650 GMT, while U.S. West Texas Intermediate crude for June was up 0.4%.
• Shipments of crude in April to China were 44.72 million metric tons, or about 10.88 million bpd, according to China's customs data released on Thursday.
• That was up 5.45% from the relatively low 10.4 million bpd imported in April 2023.
• The falling U.S. crude inventories amid rising refinery intake and a year-on-year increase in Chinese imports last month supported higher demand expectations for the world's two largest crude consuming nations.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London rose to a more than one-month high, helped by stronger rates across vessel segments.

• The overall index added 5.8%, marking its highest level since March 21.
• The capesize index gained 9.3%, overing a one-month peak.
• The panamax index was up 3%, rising for the fifth straight session.
• The supramax index was also up 1.1%.

Equity markets

US stock indexes settled mixed.

• The Dow Jones Industrial Average rose 0.4%, posting a 1-month high, the S&P 500 finished virtually unchanged, edging down by 0.03 pt., while the Nasdaq composite slipped 0.2%.
• Mixed earnings results limited the upside in stocks.
• Meantime, hawkish comments from Boston Fed President and higher bond yields weighed on stocks.
• The 10-year T-note yield rose +3.5 bp to 4.492%.
• US MBA weekly mortgage applications rose +2.6% in the week ended May 3.
• The purchase mortgage sub-index rose +1.8%.
• The refinancing mortgage sub-index rose +4.5%.
• The average 30-year fixed rate mortgage fell -0.11 bp to 7.18%.
• US Mar wholesale trade sales fell -1.3% m/m.
• In Europe, the Euro Stoxx 50 climbed to a 1-month high and closed up +0.44%.
• German Mar industrial production fell -0.4% m/m.
• In China, the Shanghai Composite index closed down -0.61%.
• In Japan, the Nikkei Stock Index closed down -1.63%.

This morning, Asian shares were mixed.

• The Nikkei 225 index was up 0.5%, the Hang Seng in Hong Kong added 1.2%, the Shanghai Composite index gained 0.9%, the Kospi lost 0.6%, and Australia’s S&P/ASX 200 shed 0.9%.
• China reported better than expected trade figures for April.
• Chinese exports rose 1.5% in April from a year earlier, while imports jumped 8.4%.
• That suggests a stronger recovery in demand than earlier data had suggested.
• In Japan, Automaker Mitsubishi Motors Corp.'s shares dropped 4.7%, while Toyota Motor edged 0.1% higher.

Currency trading

The dollar index rose.

• Boston Fed President said interest rates will likely need to be held higher for longer to reduce price pressures.
• The dollar strengthened also as investors bet on the U.S. economy outperforming peers.
• On this wake, higher T-note yields supported the dollar.
• However, US Mar wholesale trade sales unexpectedly fell, capping gains.
• Meantime, the EUR/USD fell.
• Expectations for the ECB to begin cutting interest rates next month weighed on the euro.
• However, the better-than-expected German industrial production report limited losses in the euro.
• On the other hand, the USD/JPY rose, with the yen falling moderately on carryover pressure from Tuesday when Masato Kanda, said the government doesn’t need to intervene in the forex market.
• On the positive side were hawkish comments from BOJ Governor Ueda, who said, "a monetary policy response might be needed" if the yen continues to weaken.

This morning, the U.S. dollar rose to 155.59 Japanese yen from 155.52 yen. The euro rose to $1.0751 from $1.0747.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Jul contract was down 8.6c/bu to 634c/bu;
• Kansas wheat Jul contract was down 15.4c/bu to 648.4c/bu;
• Minneapolis wheat Jul contract was down 16.2c/bu to 702.6c/bu;

• MATIF wheat Sep was down €1.5/t to €241.25/t;

• ASX wheat Jul contract was unchanged to A$365/t;
• US DWI Cash (durum wheat index), was unchanged to 765.29c/bu;
• 1CWAD (Canadian durum) avg spot prices was down C$2.65/t to C$395.26/t;
• EDW (EU durum) Sep contract was unchanged to €340/t;

• Chicago corn Jul was down 8.4c/bu to 458.4c/bu;

• MATIF corn Jun was down €5.25/t to €204/t;

• Chicago soybeans Jul down 18.6c/bu to 1227.6c/bu;
• Winnipeg canola Jul was down C$10.4/t to C$656.7/t;

• MATIF rapeseed Aug was up €3/t to €480.5/t;

• Brent crude Jul was up US$0.42 to $83.58;
• WTI crude Jun was up US$0.61 per barrel to $78.99;

• BADI (Baltic Dry Index) was up 120 points to 2.203;

• Dow Jones was up 172.13 points to 39.056,39;
• S&P 500 was down 0.03 points to 5.187,67;
• NASDAQ Composite down 29.80 points to 16.302,76;

• US dollar index (Jun '24) was up 0.126 points to 105.426;

• AUD/USD weaker at US$0.6579;
• USD/CAD weaker at $1.3720;
• EUR/USD weaker at $1.0748;
• USD/RUB firmer at ?91.7417.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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