November 17, 2023 - Newswires

A broad commodity selloff hit grain markets ...

Good afternoon, Farmer Family ...

US farm markets were affected Thursday by a broad commodity selloff, with the only exception of corn which rose by 0.85%.

Soybeans slumped 1.79%, suffering double digit losses.

The rest of the soy complex was also in the red, as soymeal shifted 0.51% lower, and soyoil tumbled 2.68%

Wheat prices were also in the red, with some contracts incurring double-digit losses. Chicago SRW, indeed, fell 1.25%, Kansas City HRW dropped 1.95%, and Minneapolis spring wheat lost 1.26%.

• Corn bounced on better-than-expected export sales data from USDA.
• The soy complex slid on Brazil rain chances and profit taking, despite USDA revealed impressive soybean export sales data. Amid a further sharp fall in crude oil prices, financial operators, sought to reduce their positions in the whole soybean complex. Meal prices also fell back after hitting a new high in the middle of the week.
• Wheat prices stumbled into the red, as beneficial rains were expected to move across the U.S. Plains. Ample global stocks and spillover weakness from other commodities, made an additional down pressure.
• Weekly export sales report showed corn sales for 1.81 MMT, bringing cumulative season totals for the 2023/24 marketing year at 6.5 MMT.
• For soybean, export sales were robust, carving out a new marketing-year high of 3.92 MMT, the highest weekly sales volume in over 10 years, the majority of which is expected to be exported to China. That moved cumulative sales for the 2023/24 marketing year to 13.98 MMT.
• For wheat, weekly export sales were lackluster after only reaching 176.900 t. Cumulative sales for the 2023/24 marketing year reached 7.26 MMT.
• Separately, the USDA confirmed private exporters having sold 220,000 metric tons of soybeans for delivery to unknown destinations during the 2023/2024 marketing year.
• Corn basis bids were steady to mixed after trending as much as 3 cents higher at a Nebraska processor and as much as 10 cents lower at an Ohio river terminal
• Soybean basis bids fell 4 to 5 cents at two interior river terminals and lost 10 cents at an Indiana processor while holding steady elsewhere across the central U.S.
• Commodity funds were net sellers of Chicago soybeans, soymeal, soyoil and wheat futures contracts, but net buyers of corn.

This morning, Chicago wheat prices fell and headed for their biggest weekly fall since September after lower-than-expected U.S. export sales underlined weak demand and competition from cheap Russian grain.

Soybeans and corn also dipped, but both were set for weekly gains despite a sharp decline for soybeans on Thursday.

• Wheat prices were down 4.2% for the week.
• Soybeans were still around 0.5% higher for this week.
• Corn were 1.9% higher from last Friday's close.

South America

Brazil

Brazil's wheat crop in 2023/24, which is being harvested, is expected to reach 9.28 million tons, StoneX pointed out this Thursday, also increasing the expectation of imports into the country.

Now StoneX projects imports of 6.15 million tons of wheat.

Regarding wheat exports, the group maintained its estimate at 1.86 million tons.

Meantime, Conab negotiated 64.5 thousand tons of wheat, on Nov 14.

• In the first two tenders, 228,307 thousand tons of Pepro (Equalizer Premium Paid to Producer) were sold out of 329,850 offered, while only 131,500 tons were sold through PEP (Product Flow Premium) out of a total of 309,600 tons that could have been sold.
• The tenders aim to encourage the commercialization of wheat at a minimum guarantee price, which covers production costs.
• “About 424 thousand tons of wheat have already been negotiated in auctions to support the marketing and flow of wheat,” Conab said in a note.

Argentina

Buenos Aires Grain Exchange in a weekly report, updated its forecast for Argentine wheat, corn, and soybeans crops.

• The exchange now expects 17.3 million hectares will be sown with soybeans, of which, some 18% has now been planted.
• Corn planting is estimates at 7.1 million hectares, of which 25% has now been planted.
• The wheat crop for this year is expected at 14.7 MMT.

Europe

European wheat prices fell to a new five-month low, on Thursday. Oilseed prices also fell sharply during the session, though closed less lower.

• European grain prices fell yesterday against a firm euro/dollar parity above 1.08 and a sharp drop in crude oil prices.
• Farm office FranceAgriMer on Wednesday raised its forecast for French soft wheat exports outside the EU in 2023/24, supported by sales to China, but lifted its season-end stocks estimate to a six-year high.
• The International Grains Council (IGC) on Thursday raised its forecast for 2023/24 global wheat production, highlighting large global supplies.
• Heavy rain in France and to a lesser extent Germany could push the EU soft wheat area down by 0.9% next year, with yields also at risk, consultancy Strategie Grains said.
• Winter grain sowings had made little progress and crop ratings fell in the week to Nov. 13, farm office FranceAgriMer data showed on Friday.
• French farmers had sown 71% of the expected soft wheat area for next year's harvest by Nov. 13.
• Only 86% of the soft wheat crop was in good or excellent condition by Monday.
• Winter barley sowing progressed to 84%, with crop conditions at 86% good to excellent.
• Maize harvesting had made little progress, edging up to 97%.
• However, in spite rainfall, hampered maize harvesting in France, Strategie Grains raised its estimate for the 2023 crop for a third consecutive month to 61.0 million metric tons.
• It also raised by 200,000 tons its estimate for last summer's soft wheat harvest to 125.8 million tons.
• Additionally, other analysts said there was little disruption to German sowing while conditions in Poland were favourable.
• Polish winter wheat planting was in its final stages and had been boosted by rapid maize harvesting and improved soil moisture in October.
• Poland's winter wheat area for the 2024 harvest is not likely to be smaller than the 2.26 million hectares harvested in 2023 and could even be expanded, analysts said.

North Africa

• According to the USDA attaché, Egyptian marketing year (MY) 2023/24 wheat imports are estimated at 12.0 million metric tons (MMT), up by 6.9 percent from MY 2022/23 due to lower area and production.
• Corn imports are estimated at 6.5 MMT in MY 2023/24, an increase of 8.3 percent from the previous year as higher corn area is more than offset by increased heat stress and insects.
• Rice imports are estimated at 450,000 MT in MY 2023/24, unchanged from the previous marketing year.

Turkey

Turkish durum wheat prices were stable this week, in spite higher USD/TL exchange rate.

• For the last 60 days, on average, Turkish durum wheat prices have been in the range of 325-350 USD/MT.
• As of today, Turkish local market prices saw Farmer's prices at 9700-9800 TL/MT.
• First Class Wheat (with 13-15% protein) was valued at 10300 TL.
• Second Class Wheat (with 12-13% protein) was valued at 10000 TL.
• TMO Sales Price, for the First Class Wheat was at 10200 TL.
• TMO Sales Price, for the Second Class Wheat was at 10000 TL.

(Euro= 31.14 TL - USD: 28.72 TL)

Ukraine

Ukraine has harvested almost 74 million metric tons of grain and oilseeds from the new 2023 harvest so far, the agriculture ministry said on Friday.

• The output included 53.8 million tons of grain and 20.2 million tons of oilseeds.
• The volume included 22.4 million tons of wheat, 5.9 million tons of barley, 23.7 million tons of corn and smaller contributions from other cereals.
• The ministry said farmers had harvested 4.5 million tons of rapeseed, 11.6 million tons of sunseed and 4.8 million tons of soybeans.
• Meantime, some 151 ships have used Ukraine's new Black Sea shipping corridor since it was set up in August, the Interfax-Ukraine news agency reported on Friday, citing a senior government official.
• A total of 4.4 million metric tons of cargo, including 3.2 million tons of grain, has been shipped via the corridor, Yuriy Vaskov, deputy minister for renovation and infrastructure, was quoted as saying.
• Vaskov said that 30 ships were currently loading at Ukrainian ports. They included 22 ships that would carry 700,000 tons of grain and eight ships readying 500,000 tons of other cargo.
• On the other hand, warm weather and rains in the first 10 days of November have improved the condition of Ukrainian winter crops in many regions, state weather forecasters said on Wednesday.
• The agriculture ministry said on Tuesday that farmers had sown about 5.7 million hectares of winter crops as of Nov 14, and the area included 3.97 million hectares of winter wheat.

Russia

Russia's agriculture minister said on Friday that Moscow had begun free shipments of grain totalling up to 200,000 tonnes to six African countries, as promised by President Vladimir Putin in July.

• Ships are headed for Burkina Faso and Somalia.
• Additional shipments to Eritrea, Zimbabwe, Mali and the Central African Republic would soon follow.

In other news, the Ministry of Agriculture has extended the fertilizer export quota.

• The department extended the quota from November 30, 2023 to May 31, 2024. The new quota is set at 17 million tons.

Southeast Asia

• Malaysian palm oil prices closed lower on Thursday, tracking a decline in soyoil prices on the Chicago Board of Trade, while profit-taking also weighed.
• Indonesia plans to set its crude palm oil reference price at $750.54 per metric ton for Nov. 16-30.
• Indian farmers have planted wheat on 8.6 million hectares since Oct. 1, when the current sowing season began, while sowing of rapeseed, was at 6.9 million hectares.

Australia

Western Australia’s winter crop now being harvested is forecast to produce 14.51 million tonnes (Mt) of grain, according to the Grain Industry Association of WA (GIWA) November Crop Report.

• Meantime, Aussie wheat values were mostly stagnant with some localized pressure around delivered homes but by and large there was no real change from the previous day.
• There is better quality grain now being received, and the protein profile is adjusting slightly as harvest in eastern Australia moves south.?
• Barley was $5/t firmer yesterday.
• Canola was resilient if compared with the continued slide in?offshore markets, as local values were nominally down $2-5/mt with the better?rail receival sites holding value.?

International grain and oilseed tenders & trade

• China's Sinograin said on Friday it would auction 222,356 metric tons of imported corn on Nov. 21. The corn was imported from the United States, it added.
• ODC Tunisia purchased today 25,000 t durum wheat from Viterra at 425.79 USD c&f. ODC Tunisia got following offers in its today durum wheat tender to be shipped between 10-20 Dec 2023, from Amber at 427,89 USD, Casillo at 429,00 USD, and Viterra at 425.79 USD.

IGC - November Update

• The IGC released its new production estimates, raising production potential for the 2023/2024 wheat season by +2 Mt to 787 Mt. If realized, the world wheat crop would still be the second largest on record. Consumption volumes are up on last year, and end-of-season stocks remain close to last month's estimates, at 264 Mt up by one million from October but down -6% on last year.
• Corn production volumes have also been increased by +4 Mt to over 1.223 billion t. Despite an increase in consumption, corn carryout was estimated at 285 million tonnes, up by two million from October and by 10 million from the year ago.
• Global soybean consumption in 2023/24 is forecast to rise to a peak. 2023/24 world soyabean output is seen marginally higher m/m, at a record of 395m t, 7% higher y/y (year-on-year), while consumption and aggregate inventories are predicted broadly steady m/m. Trade is projected unchanged from before, at 168m t (-2% y/y), including smaller deliveries to key destinations in the Americas and Asia. World soybean ending stocks were left unchanged on the month at 62 million tonnes, which would be up by eight million from the previous year.

Outside markets ...

Energy markets

Oil prices tumbled about 5% to a four month-low, on Thursday, as investors worried about global oil demand following weak data from the U.S. and Asia.

• The number of Americans filing new claims for unemployment benefits increased to a three-month high last week.
• U.S. retail sales fell for the first time in seven months in October as motor vehicle purchases and spending on hobbies dropped.
• OPEC and the International Energy Agency (IEA) have both predicted supply tightness in the fourth quarter, but U.S. data on Wednesday showed inventories were abundant.
• Meanwhile, an expected slowdown in Chinese oil refinery throughput also gave investors pause.

This morning, oil prices were little changed, but on track for their fourth straight week of losses.

• JPMorgan commodities research said on Friday its global oil demand tracker showed demand averaged 101.6 million barrels a day (bpd) in the first half of November, running 200,000 bpd lower than its projection for the month.
• However, analysts said that the recent drop in prices is also likely to make Saudi Arabia extend its additional voluntary oil output cut of 1 million bpd into 2024, that should help erase the expected surplus and provide some support to the market.

Ocean freight markets

The Baltic Exchange's main sea freight index in London, rose for the sixth consecutive session on Thursday, as vessel rates gained across all segments.

• The overall index, gained 4.2%.
• The capesize index rose to its highest in three weeks, adding 3.5%.
• The panamax index rose 6.3%, to its highest since mid-April.
• The supramax index climbed to its highest in three weeks, adding 3.3%.

Equity markets

US stock indexes settled mixed.

• Cisco Systems closed down more than -9%, Walmart closed down more than -8%.
• A more than -4% plunge in both Brent and WTI crude oil to a 4-month low pressured energy stocks.

However, stocks recovered from their worst levels as bond yields fell on several Fed-friendly economic reports.

• U.S. weekly initial unemployment claims rose +13,000 to 231,000.
• Weekly continuing claims rose +32,000 to a 2-year high of 1.865 million.
• Oct manufacturing production fell -0.7% m/m, the biggest decline in 4 months.
• The U.S. Oct import price index ex-petroleum fell -0.2% m/m, just above expectations of -0.3% m/m.
• The Nov NAHB housing market index unexpectedly fell -6 to an 11-month low of 34.
• The Nov Philadelphia Fed business outlook survey rose +3.1 to -5.9.
• The 10-year US T-note yield fell -8.8 bp to 4.443%.?

Stocks also had support after the Senate Wednesday night voted 87-11 to approve a temporary funding measure to avert a government shutdown.

• Overseas, Japan Oct exports rose +1.6%y/y, while Oct imports fell -12.5% y/y.
• Japan Sep core machine orders rose +1.4% m/m.
• The Japan Sep tertiary index fell -1.0% m/m, the biggest decline in 6 months.
• China Oct new home prices fell -0.38% m/m, the biggest decline in 8-1/2 years, and the fifth consecutive month home prices have fallen.

This morning, Asian shares were mostly lower.

• Hong Kong’s Hang Seng sank 2.1%, dragged lower by a 9.8% slump in shares of Chinese e-commerce giant Alibaba following its cancellation of a plan to spin off its cloud computing unit.
• The Shanghai Composite index edged 0.1% higher.
• Tokyo’s Nikkei 225 index gained 0.5% after Bank of Japan Gov. Kazuo Ueda indicated, in comments to parliament, that the central bank has no immediate plans to change its ultra-lax monetary policy.
• In South Korea, the Kospi fell 0.7%.
• Australia’s S&P/ASX 200 slipped 0.1%.
• Taiwan’s Taiex gained 0.2% and the Sensex in Mumbai dropped 0.2%.

Currency trading

The dollar index dipped.

• Weak U.S. economic news knocked bond yields lower and weakened the dollar’s interest rate differentials.
• The dollar was also undercut by dovish comments from Fed Governor Cook and Cleveland Fed President.
• The dollar saw underlying support as weakness in stocks boosted liquidity demand for the dollar.
• The EUR/USD rose slightly and posted a 2-1/2 month high.
• The USD/JPY fell, with the yen rallying moderately against the dollar, as Thursday’s better-than-expected Japanese trade news boosted the yen, as did a stronger-than-expected Japan Sep core machine orders report.

This morning, the U.S. dollar was trading at 149.59 Japanese yen, down from 150.73 yen. The euro rose to $1.0855 from $1.0853.

Settlement prices for key commodity, index and currencies

• Chicago wheat Dec contract was down 7c/bu to 553.4c/bu;
• Kansas wheat Dec contract was down 12.4c/bu to 627.2c/bu;
• Minneapolis wheat Dec contract was down 9.2c/bu to 726c/bu;
• MATIF wheat Dec contract, was down €2/t to €226.25/t;
• ASX wheat Jan '24, was down A$3/t to A$388/t;
• Black Sea wheat Dec contract not quoted since August 11, 2023;
• US DWI Cash (durum wheat index) was unchanged to 923.59c/bu;
• 1CWAD (Canadian durum wheat) avg spot prices was up C$0.31/t to C$465.96/t;
• EDW (EU durum) Dec contract, was unchanged to €390.5/t;
• Chicago corn Dec was up 4c/bu to 474.6c/bu;
• MATIF corn Mar was down €1.25/t to €206/t;
• Chicago soybeans Jan down 24.6c/bu to 1360.2c/bu;
• Winnipeg canola Jan down C$12.7/t to C$706.8/t;
• MATIF rapeseed Feb contract, was down €3.75/t to €438.5/t;
• Brent crude Jan was down US$3.76 per barrel to $77.42;
• WTI crude Dec was down US$3.76 per barrel to $72.90;
• BADI (Baltic Dry Index) was up 70 points to 1.758;
• Dow Jones was down 45.74 points to 34.945,47;
• S&P 500 was up 5.36 points to 4.508,24;
• NASDAQ Composite up 9.84 points to 14.113,67;
• US dollar index (Dec '23) was down 0.032 points to 104.233;
• AUD/USD weaker at US$0.6468;
• USD/CAD firmer at $1.3754;
• EUR/USD firmer at $1.0852;
• USD/RUB weaker at ?89.3260.

That's all, thank you.

We wish you a nice day.

Author:?Sandro F. Puglisi

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