Wheat turned lower, on beneficial rains in U.S. Plains; Corn and soybeans eased on profit-taking after hitting multi-month highs; The strengthening in US dollar also weighed over markets ...
Good morning, Farmer Family ...
US farm markets ended lower on Monday.
The rest of the soy complex also was in the red as soymeal dipped 0.37%, while soyoil slid 1.29%.
Wheat prices spilled lower, with Chicago SRW tumbling 1.22%, Kansas City HRW falling 0.84%, and Minneapolis spring wheat dropping 0.96%.
- Wheat turned lower, as weather forecasts for rainfall in the drought-stricken U.S. Plains promised to give the growing region some badly needed moisture.
- The Commodity Weather Group predicted a "notable" increase in moisture for Midwest and Plains wheat, adding that weekend showers had mostly removed winter wheat deficits in the same region.
- Some rain has also fallen and more showers are forecast in the Black Sea region.
- Also weighing on prices were expectations that Trump could bring about a ceasefire between Russia and Ukraine, removing the "war premium" in wheat prices.
- Meanwhile, corn and soybeans eased on profit-taking after hitting multi-month highs the previous Friday.
- Prices of both crops have been supported by a downgrade in U.S. production estimates.
- Soybeans have also benefited from rallying prices of soyoil and palm oil.
- However, a stronger dollar made US commodities less competitive on the global market.
- Weakness in the crude oil market also weighed both on corn and soybeans.
- Global supply of corn and soybeans remains plentiful and recent rains have improved growing conditions in major exporters Brazil and Argentina.
Basis bids for corn and soybeans were flat to stronger in the U.S. Midwest, as the harvest wound to a close and buyers sought to entice selling.
- The corn basis moved higher at a processor and river terminal.
- The soy basis ticked up at an elevator and a crush plant.
- Spot basis bids for hard red winter wheat were unchanged, amid a quiet trade following drenching rains that eased drought in much of the U.S. Plains.
- Protein premiums for HRW wheat shipped by rail to or through Kansas City increased by 4 cents for wheat with 11% to 11.2% protein and by 5 cents for wheat with 13.8% protein.
Wheat prices slipped towards a two-month low; Soybean also dipped, while corn inched higher.
- The most-active wheat contract on the Chicago Board of Trade was down 0.1%, as of 0313 GMT, soybeans fell 0.2%, while corn rose 0.3%.
- A strengthening dollar made U.S. crops less competitive.
- Forecasts for more rain in the dry U.S. Plains improved the outlook for wheat crop production.
- A rally in soyoil prices faltered.
- Meantime, industry players are awaiting the U.S. Department of Agriculture's weekly crop progress report, which will record condition ratings for the nation's winter wheat crop.
Canada
Total wheat production for Canada is forecast to reach 34.3 million tonnes in marketing year 2024-25, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.
- That is up from 32.9 million tonnes in 2023-24.
- Preliminary model-based field crop estimates showed Canada’s spring wheat production in 2024-25 fell 1% over the previous year on a 2.9% decline in area planted, partly offset by improved average yields from 3.29 tonnes per hectare to 3.37.
- Durum wheat production for 2024-25 was forecast up 48% over the previous year on a 5.5% increase in area planted with better soil moisture, and improved average yields from 1.72 tonnes per hectare to 2.41, the FAS said in its latest update on Nov. 4.
- Industry contacts in Ontario reported that winter wheat planting was nearing completion the week of Sept. 28 and planting conditions had been ideal in most parts of the province, the FAS said.
- Statistics Canada said total stocks of wheat for 2024-25 fell 18.5% year over year to 4.6 million tonnes as of July 31.
- The decline was partially due to lower total national supply, down 1% year over year to 38.7 million tonnes, the FAS said.
- Total wheat milled increased in 2023-24 to 3.29 million tonnes and is expected to grow to 3.6 million tonnes in 2024-25 due to expanded capacity.
- Data thus far indicates that the quality of the 2024 wheat crop is high.
- Exports in 2024-25 are forecast at 25.5 million tonnes, up slightly from the estimated 25.37 million tonnes in 2023-24.
- In 2023-24, non-durum wheat exports were estimated at 21.5 million tonnes, up 6% over the previous year, the FAS said.
- Durum wheat exports in 2023-24 fell 30% to 3.5 million tonnes.
South America
Brazil's soybean planting for the 2024/25 season had reached 67% of the total expected area as of last Thursday, agribusiness consultancy AgRural said.
- That is up from 54% the previous week and 61% a year earlier.
- "In general, both planting and crop development are in progress without major problems".
- The consultancy also said that farmers in Brazil's key center-south region had planted 72% of the expected area for the 2024/25 first corn crop as of last Thursday.
- That is up from 59% the previous week but below last season's 76%.
Rains over the weekend in parts of Argentina's agricultural heartland mean that farmers will able to keep up the quick pace in planting of this season's soy crop, the Rosario grains exchange said.
- The South American nation's main growing region logged between 7mm and 15mm of rain in recent days, but the north and the eastern plains saw up to 40mm, according to the exchange.
- Now with dry weather expected for the next few days, farmers should be able to carry on sowing an expected 17.7 million hectares of farmland with soybeans for this season, the exchange said.
- Almost 850,000 hectares have been sown in the last seven days.
- The Buenos Aires grains exchange said last week that around 8% of the estimated soybean area for this season had been planted so far.
- That exchange puts out weekly estimates, and pegs the total area at the slightly higher 18.6 million hectares.
- According to the Rosario exchange, soybean production is expected to be between 52 million and 53 million metric tons this season.
Europe
European grain markets ended mixed, mostly higher.
- December wheat on the Paris-based Euronext exchange closed up 0.1% at 216 euros ($230.00) a metric ton.
- MATIF corn Mar contract was down €0.25/t to €210.75/t, while rapeseed Feb was up €2.5/t to €539/t.
- Wheat rose in late trade, as an export-boosting fall in the euro countered earlier weakness caused by a sharp drop in Chicago markets and lower Russian export prices.
- The euro dropped to a 6-1/2 month low against the dollar, making euro zone wheat cheaper in export markets.
- The dollar rallied since the announcement of the election of Donal Trump as President of the United States, as the eurozone would be affected like China by future increases in US customs duties.
- However, a public holiday in France kept some market participants away.
- Russian wheat exports have slowed but remain at the hefty total of almost a million tons a week.
- Meanwhile wheat exports from Ukraine could also rise sharply if incoming U.S. President Donald Trump can de-escalate the war with Russia.
- That would improve the flow from Ukraine and Russia, and lower grain war risk insurance premiums.
- Rapeseed, meanwhile, was able to continue its progress despite the fall in crude oil.
- The market, indeed, remains supported by the upward movement in palm oil.
Ukraine
Ukrainian farmers had sown almost 5 million hectares of winter grains for the 2025 harvest as of Nov. 11, or 96.3% of the expected area of 5.19 million hectares, the agriculture ministry said.
- The area included almost 4.4 million hectares of winter wheat, or 97.2% of the projected area.
- Farmers had also sown 577,800 hectares of winter barley and 68,100 hectares of rye.
- Ukrainian farm minister said last week that the country's farmers would meet its winter sowing target for the 2025 harvest, as the weather situation is not critical.
- Meantime, Ukraine's sunflower seed harvest may jump by 6-8% in 2025 thanks to a possible 5% rise in next year's sowing area, analyst APK-Inform said.
- Conversely, the area under soybean production is likely to decrease in 2025 by 7% to 10% and the harvest by up to 5%, depending on weather conditions.
- The "current pricing situation in this sector" was the main reason for the outlook.
- APK-Inform said last week that indicative export prices for Ukrainian sunflower seeds continued to rise, adding another $15-$30 per metric ton over the past seven days and reaching $505-$535 on a Carriage Paid To (CPT) basis as of Nov. 6.
- Ukraine has almost completed the 2024 sunseed harvest, threshing 9.6 million metric tons of the commodity from 95.2% of the planted area as of Nov. 8.
- APK-Inform has also said the 2024 soybean harvest rose by 8% to 5.9 million tons.
Russia
According to the Russian Agriculture Ministry, 128 million tons of grain had been harvested by the end of last week, while the forecast for this year's crop of 130 million tons in net weight has been confirmed.
- For the new season, as of Nov. 1, winter grains were sown on 16.8 million hectares.
- The government recommended that the sowing area for the 2025 harvest should not be lower than in the previous year.
- Meantime, Russia’s southern regions received more rain this week, gradually improving crop conditions.
- On the demand side, Russia's weekly grain exports are estimated at 0.77 million tons, including 0.72 million tons of wheat.
- That is down from 1.19 million tons the previous week, when wheat exported had been 1.12 million tons.
- On this wake, Sovecon forecasts grain exports in November at 3.7-4.1 million tons.
- That is up from 3.2 million tons recorded a year ago.
- However, that represent a 22% month-over-month decline.
- That would also be the lowest monthly tally since July, if realized.
- In this context, Russian wheat export prices fell last week.
- According to the IKAR, the price of Russian wheat with 12.5% protein, scheduled for free-on-board (FOB) delivery in December, was down $4 to $228 per metric ton at the end of last week.
- Sovecon reported that prices for Russian wheat with the same protein content were $231-$234 per ton, down from $235-$240 the previous week.
- Relatively high supplies and very limited demand, weighed over prices.
- The Russian Grain Exporters and Producers Union, advised its members not to use foreign intermediaries at international grain tenders.
- Also, the Agriculture Ministry advised exporters not to sell wheat at prices below a certain level.
- New rules on Russia's wheat exports inadvertently helped Ukraine secure lucrative sales to Egypt's GASC last week.
- As for the other products, domestic 3rd class wheat, European part of Russia, excludes delivery was at 15,500 rbls/t, +100 rbls/t (Sovecon).
- Sunflower seeds were at 38,000 rbls/t, +400 rbls/t (Sovecon).
- Domestic sunflower oil was at 100,175 rbls/t, +2,500 rbls/t (Sovecon).
- Domestic soybeans were at 42,050 rbls/t, +250 rbls/t (Sovecon).
- Export sunflower oil was at $1,135/t, +$25 (IKAR).
- White sugar, Russia's south was at $601.61/t, -$6.51/t (IKAR).
Southeast Asia
Malaysian palm oil prices closed up.
- The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 1.84% by the close, the highest since mid June 2022.
- Price started rally after the futures hit 5,100 ringgit due to emergence of new buying interest and short coverings.
- Malaysian benchmark palm oil futures have risen more than 35% this year and are expected to trade above to around 5,000 ringgit ($1,141) per metric ton until June 2025, supported by tight supply and bullish demand.
- Meantime, Dalian's most-active soyoil contract fell 0.47%, while its palm oil contract gained 2.16%.
- The ringgit weakened 0.62% against the U.S. dollar, making the vegetable oil cheaper for buyers holding foreign currencies.
Australia
Harvest receivals continued to increase across Australia.
- Per latest Viterra’s weekly harvest report, growers delivered 426,482 tonnes of grain to Viterra in the week to Sunday, bringing total harvest receivals for the current season 591,515t.
- Deliveries increase towards the end of the week after weather earlier in the week held growers up slightly, the report said.
- Barley, wheat, and lentils have made up most deliveries.
- Canola is also starting to come in, including the first delivery of genetically modified crop.
- Western Australian bulk handler CBH Group received 1.86 million tonnes (Mt) of grain in the week to Sunday to take its total intake from the current harvest to 3.99Mt.
- The western part of the Albany Zone was the only part of WA’s grainbelt not impacted by rain, and higher moisture limits in barley and wheat have allowed growers in affected areas to resume harvest.
- However, rain was unlikely to cause significant delays to growers’ harvest programs.
- Receivals have mostly been barley and canola, with some some growers delivering wheat.
- At the Geraldton terminal, growers are reporting high wheat yields of up to 3.5-4t/ha.
- Meantime, per latest data from the Australian Bureau of Statistics, Australia's 2023-2024 grain-marketing season, concluded at the end of September, revealed a sharp decrease in export volumes compared to the record 2022-23 season, although it did not come as a surprise.
- Total exports of the top four commodities – wheat, barley, canola, and sorghum – fell 24.9 percent, or 11.88 million tonnes (Mt), to 35.88Mt collectively.
- Total barley exports in 2023-24 finished at 7.91Mt by the end of September, 830,000t or 11.7pc higher season on season.
- Wheat exports for the season totalled 19.75Mt, a 37.8pc fall from 31.77Mt a season earlier.
- Sorghum exports from October 2023 to September 2024 were 18pc, or 680,000t lower than the previous corresponding period.
- Canola exports were unchanged.
- Other Australian grain exports of note in the 2023-24 marketing year were 1.51Mt of lentils, 430,000t of lupins, and 300,000t oats.
- In this context, canola values continued to move higher yesterday.
- Bids in Western Australia reached A$890 for conventional and $790 for GM.
- Wheat bids began the week at $367, with barley at $318.
- The east of Australia also saw canola bids increase, with conventional at $815 and GM at $760.
- Wheat was bid at $342, with barley at $299.
- Delivered Darling Downs markets continued to work higher, with grower selling still lagging.
- Barley was bid at $323 yesterday, up $15-$20 for the fortnight, with wheat bid around $338, also having risen a similar amount over this period.
- Faba bean bids remain strong, with bids at $635 for January+ into Geelong/Melbourne.
International grain and oilseed tenders & trade
- Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 114,403 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.
Outside markets ...
Oil prices fell by more than 2%, adding to the more than 2% Friday's losses.
- Notably, Brent crude futures settled down 2.76%, while U.S. West Texas Intermediate crude futures finished 3.32% lower.
- China's latest stimulus plan disappointed investors, while supply looked set to rise in 2025.
- Also, Donald Trump's U.S. election victory may continue to affect the market, analysts said.
- The U.S. dollar index slightly overshot the highs seen right after last week's U.S. presidential election, with markets still waiting for clarity about future U.S. policy.
- A stronger dollar makes commodities denominated in the U.S. currency more expensive for holders of other currencies and tends to weigh on prices.
- In China, consumer prices rose at the slowest pace in four months in October while producer price deflation deepened, data showed on Saturday, even as Beijing doubled down on stimulus to support the sputtering economy.
- Meantime, Bank of America Securities said in a note that non-OPEC crude supply was expected to grow by 1.4 million barrels per day (bpd) in 2025 and 900,000 bpd in 2026.
- Losses were limited, as the U.S. offshore production regulator said 25.7% of crude oil production and 13% natural gas output remained shut because of Hurricane Rafael.
This morning, oil prices were little changed, awaiting further price direction from OPEC's monthly report.
- Notably, Brent crude futures rose 4 cents to $71.87 a barrel, by 0745 GMT, while U.S. West Texas Intermediate crude futures were down one cent at $68.03 a barrel.
- Meantime, operators were bracing for further signals from U.S. inflation data and Federal Reserve speakers this week.
The Baltic Exchange's main sea freight index rose for the fifth straight session, boosted by robust gains in capesize and panamax vessels.
- The main index gained 63 points to 1,558 points.
- The capesize index rose 201 points to 2,517 points.
- The panamax index rose 6 points to 1,182 points.
- The supramax index lost 15 points to 1,064 points.
US stock indexes settled mixed, though all closed higher.
- The Dow Jones Industrial Average rose 0.7%, the S&P 500 edged up by 0.1%, while the Nasdaq composite gained 0.1%.
- Tesla rose 9.1%, adding to last week’s +26% surge on speculation that the company would benefit from a Trump presidency.
- JPMorgan Chase rose 1%.
- In addition, cryptocurrency-related stocks soared on speculation digital assets will benefit from the Trump administration’s pro-crypto policies.
- The Dow Jones Industrials posted new all-time highs.
- However, trading activity in equities was below average, with the cash treasury market closed for the Veterans' Day holiday.
- In Europe, the Euro Stoxx 50 closed up +1.07%.
- China's Shanghai Composite Index closed up +0.51%.
- Japan's Nikkei Stock 225 closed up +0.08%.
- The Japan Oct eco-watchers survey outlook fell -1.4 to 48.3.
This morning, Asian shares mostly fell.
- Japan's benchmark Nikkei 225 declined 0.6% in afternoon trading, Australia's S&P/ASX 200 lost 0.1%, South Korea's Kospi declined 1.6%, Hong Kong’s Hang Seng dropped 2.9%, the Shanghai Composite lost 1.2%.
- Asian stocks were weighed down by uncertainty about how Trump's policies will impact on the region.
- Chinese tech stocks have been declining lately, while investors also have their eyes on upcoming earnings reports out of China.
The dollar index rose, posting a 4-1/4 month high.
- Hawkish comments from Minneapolis Fed President boosted the dollar.
- Also, the dollar extended last week’s post-election rally on speculation that T-note yields will increase as inflation increases due to President-elect Trump’s pro-tariff policies.
- Meantime, the EUR/USD fell, posting a 6-1/2 month low.
- Dovish ECB comments undercut the euro.
- In addition, political turmoil in Germany has been negative for the euro.
- On the other hand, the USD/JPY rose.
- Monday’s economic news showed the Japan Oct eco-watchers survey outlook fell more than expected.
- The yen was also undercut after the commentary of the Oct 30-31 BOJ meeting showed policymakers discussed the need for caution when raising interest rates.
- Meantime, the price of Bitcoin surged by more than +14% and posted a new record high, boosted by President-elect Trump’s embrace of digital assets and the prospect of a Congress featuring pro-crypto lawmakers.
This morning, the U.S. dollar edged down to 153.65 Japanese yen from 153.72 yen. The euro cost $1.0634, down from $1.0660.
Settlement Prices for Key Commodity, Index & Currencies
- Chicago wheat Dec contract was down 7c/bu to 565.4c/bu;
- Kansas wheat Dec contract was down 4.6c/bu to 559.4c/bu;
- Minneapolis wheat Dec contract was down 5.6c/bu to 592c/bu;
- MATIF wheat Dec was up €0.5/t to €216.25/t;
- ASX wheat Jan '25 contract was down A$3/t to A$327/t;
- US DWI Cash (durum wheat index) was not available;
- 1CWAD (Canadian durum) avg spot price was up C$0.14/t to C$326.22/t;
- EDW (EU durum) Dec contract was unchanged to €319.5/t;
- Chicago corn Dec contract was down 1c/bu to 430c/bu;
- MATIF corn Mar was down €0.25/t to €210.75/t;
- Chicago soybeans Jan was down 8c/bu to 1,022.2c/bu;
- Winnipeg canola Jan contract, the market was closed. The latest value was C$665.1/t;
- MATIF rapeseed Feb was up €2.5/t to €539/t;
- Brent crude Jan was down US$2.04/barrel to $71.83;
- WTI crude Dec was down US$2.34/barrel to $68.04;
- BADI (Baltic Dry Index) was up 63 points to 1.558;
- Dow Jones was up 304,14 points to 44.293,13;
- S&P 500 was up 5,81 points to 6.001,35;
- NASDAQ Composite was up 11,99 points to 19.298,76;
- US dollar index (Dec '24) was up 0.567 points to 105.457;
- AUD/USD weaker at US$0.6573;
- USD/CAD firmer at $1.3925;
- EUR/USD weaker at $1.0649;
- USD/RUB weaker at ?95.9978.
Author: Sandro F. Puglisi
Source: Me, AAFC, ABARES, Abiove, AHDB, Amis, Argus Media, Baltic Exchange, Buenos Aires Grain Exchange, CFTC, CGC, China AgMin, Clear Grain Exchange, CME, Conab, Copernicus, CWG, ECB, ECMWF, EIA, Euronext, European Commission, Eurostat, FAO, FCI, FED, GASC, GIWA, ICE, IEA, IGC, IKAR, JRC MARS Bulletin, LSEG, MPOB, National Bureau of Statistics of China, ODC, OIAC, RBA, Reuters, Rosario Grain Exchange, Russia AgMin, Russian Grain Union, S&P Global, SovEcon, StatCan, USDA, UA AgMin, and Others ...
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