November 27, 2023 - Newswires

Soybeans fell, as rain benefiting Brazil's growing area ...

Soyoil sank, after U.S. appeals court struck down a govt decision on small refiners ...

Wheat fell to new lows ...

Good morning, Farmer Family ...

US farm markets eroded early week's gains on Friday, sending prices into the red for the week - it was a “Red/Black Friday” ...

Corn prices lost 1.17%.

Soybeans sank 1.9%.

The rest of the soy complex also was faded, as soymeal eased 0.15%, while soyoil stumbled 3.86% lower.

Wheat prices fell across all the board, with Kansas City HRW leading the downside losing 2.03%, Minneapolis spring wheat was behind, losing 1.97%, while Chicago SRW fared the best down 1.26% for the session.

• Corn prices ended lower, as favorable rains in dry growing areas of Brazil hung over grain markets. But prices were more pressured, after the abrupt shift in the White House’s stance on ethanol policy, which added to the bearish sentiment. Some rafinery are threatening higher prices as part of the White House’s plan to increase ethanol blending rates across the country to 15% from the current level of 10%. As a result, the White House will likely delay its expected plan to move forward with the E15 gasoline blending proposal until gasoline prices moderate. That could take some of the wind out of prices in the corn market in the coming days, as well as cash prices for ethanol.
• Soybeans tumbled under pressure from favorable rains in Brazil, with the market pulling back about 5% since jumping a week earlier.
• Agribusiness consultancies Safras & Mercado and hEDGEpoint lowered forecasts for Brazil's 2023/24 soybean output, though analysts still expect the country to produce a record crop.
• In Argentina, the grains trade is largely "paralyzed" by a lack of soybeans, but the first sprouts of the 2023/24 soybean crop appear in good shape after rains.
• Losses in soyoil helped drag down soybeans, after a U.S. appeals court said on Wednesday it struck down the Biden administration's decision to deny small refiners "hardship waivers" that exempt them from biofuel mandates.The ruling scaled back market expectations for soyoil demanded for renewable diesel and biodiesel production in the coming year, and that sentiment sent nearby Jan24 soyoil prices to their lowest level since mid-November 2023.
• In the wheat market, prices finished lower, with K.C. and MGEX wheat setting contract lows.
• Snow is also expected to ease dryness in wheat-growing areas of the U.S. Plains, while frigid temperatures will not be cold enough to damage crops planted this autumn.
• Lackluster export demand for the US origin, and strong competition from cheap Black Sea origins, continued to pressure over global wheat markets.
• USDA’s delayed Export Sales indicated 171,753 MT of all wheat bookings during the week of November 16. ?A light new crop sales total of 25,450 MT was also reported. The total old crop export sale commitments were at 12.113 MMT.?
• The report tallied corn bookings in the week that ended on November 16 at 1.432 MMT. Export commitments (shipped and unshipped sales) were at 22.531 MMT.
• For soybean, the report showed soybean sales backing off to a 7-week low at 961,270 MT. Sales for the 24/25 crop were at 9,000 MT for that week. The Total of shipped and unshipped sales for 23/24 reached 29.055 MMT.
• Soy meal sales were at 203,619 MT, while bean oil sales were shown at 282 MT for the current marketing year, with the next MY at a net sale of 372 MT.
• The USDA, separately, confirmed exporters sold 129,000 tonnes of U.S. soybeans to China and another 323,400 tonnes of U.S. soybeans to unknown buyers.
• Spot basis bids for corn and soybeans held steady across the U.S. Midwest on Friday and cash-market activity was quiet with some facilities closed for a long weekend after Thursday’s Thanksgiving holiday.
• Ditto for hard red winter (HRW) wheat, across the southern U.S. Plains.
• Commodity funds were net sellers of CBOT soybean, soyoil, soymeal, wheat and corn futures contracts.

For the week ...

• Corn prices gave back gains from early in the week plus some on Friday, as December was down 0.79% on the week.
• Soybeans faced some serious selling pressure on either side of the Thanksgiving holiday to fade off Monday/Tuesday strength. January indeed was down 0.71% since the prior Friday.
• December soymeal posted a gain of just 0.9% for the week, but January down 0.55%.
• Soyoil was 0.92% lower during the week, mainly on Friday's collapse.
• Wheat continued to be under pressure, as all three exchanges were down on the week. Chicago SRW was down the least, as December was 0.36% lower. Kansas City HRW was 2.59% in the red since the prior Friday. Minneapolis spring wheat, dropped below $7 for the first time since May of 2021, posting a 2.63% loss on the week.

This morning, soybeans firmed, as forecasts of lower output in Brazil underpinned prices.

Wheat inched higher, recouping some of last session's losses while corn gained ground.

• The week start with Export Inspections data published in the afternoon, while the final NASS Crop Progress report for the year will out overnight after the sessions close.
• The EIA will released their weekly production and stocks report for ethanol on Wednesday, per normal.
• The weekly Export Sales data will be back to Thursday afternoon.
• As the calendar switches to December on Friday, we will receive the monthly USDA Grain Crushings, Fats & Oils, and Cotton Systems reports.

Canada

Wheat prices across the Canadian Prairies lost ground during the week ended Nov. 24, with Canadian Western Red Spring Wheat and Canada Prairie Red Spring Wheat incurring larger declines than those for Canadian Western Amber Durum.

• Average CWRS (13.5%) prices sank C$10.25 to C$10.36 per tonne, ranging from about C$315.35 per tonne in Northeastern Saskatchewan to C$340.43 350.79 per tonne in Southern Alberta.
• Average CPRS (11.5%) wheat were weaker C$2.03 to C$4.30 per tonne (as of Nov 23). Bids ranged from C$271.14 per tonne in southeastern Saskatchewan to C$287.22 per tonne in Southern Alberta.
• Average CWAD prices dropped, falling between C$1.18 to C$1.26 per tonne. Bids ranged from C$458.60 per tonne in Northeastern Saskatchewan to C$467.22 per tonne in Northwestern Saskatchewan.

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

• Common wheat deliveries into the handling system for the week ending Nov 19, were at 582,1k mt, and durum at 68,8k mt.
• Canadian wheat exports for shipping week 16 came in at 472,1k mt, for a total of 6297,5k mt YTD.
• Durum wheat exports were at 60.6k mt, for a total of 881,9k mt YTD.
• Commercial stocks stood at 2.851,4k mt for common wheat, and at 501,8k mt for durum.

As we said on Friday, COFCO, China’s state grain buyer and processor, announced that Canadian durum had been imported into China for the first time in recorded history. However shipping data out of Canada has not shown any Chinese purchases of Canadian durum in the past year, through the latest data update from September. May there be a discrepancy between Chinese importers and Canadian exporters in classifying durum wheat?

South America

Brazil

Agribusiness consultancies Safras & Mercado and hEDGEpoint on Friday reduced their estimates for Brazil's 2023/24 soybean crop, though Safras noted the projection was still for a record crop even after the cut.

• Brazilian soybean producers have already sown 75.1% of the area destined for the grain, estimated at 45 million hectares in this 2023/24 harvest, Safras & Mercado said.
• Between November 17th and 24th, the state that saw the most progress in terms of soybean planting was Bahia, going from 45% to 65% of the area.
• As for the country's total production, Safras projected it to be 161.38 million tons and the average productivity to be 3,555 kg/ha (59.2 bags).
• hEDGEpoint cut its projection to 160.1 million tons.

In other news, the economic subsidy auctions for wheat from the 2023 harvest , held past Thursday by the National Supply Company (Conab) , moved only 9.7% of the offer.

• Considering the Equalizer Premium Paid to the Producer (Pepro) and Product Flow Premium (PEP) auctions, 31.92 thousand tons were negotiated out of a total of 329.85 thousand tons that could be auctioned.
• Pepro once again aroused more interest than PEP, with 31.02 thousand tons sold, 17.67% of the total.
• In PEP, 900 tons were sold, or 0.58%.
• The total volume sold at auctions was 50% below a week earlier, when 64 thousand tons were traded.
• Only wheat from Rio Grande do Sul was sold in both auctions, totaling 31.92 thousand tons of 140 thousand tons of cereal offered from the state, both ending in the full value of the offered premium of R$ 488.60 per ton type bread 1, PH 78.
• Conab will hold new auctions to support the marketing of wheat on Thursday.

Argentina

In Argentina, the first sprouts of the 2023/24 soybean crop appeared in good shape after rains.

• The Buenos Aires Grain Exchange estimated 34.8% of Argentina’s soybean crop was planted as of last Thursday, with “good emergence and growth” noted, though some isolated incidents of replanting were reported. The weekly advance was most pronounced in northern and southern regions.
• Corn planting was 26% complete, with conditions rated 96% fair/excellent.
• The Exchange also reported that for the week ending 22 Nov, wheat harvest was 26% complete, with conditions rated 64% fair/excellent.
• Average yields were seen at 1.8t/ha, exceeding earlier expectations. Production maintained at 14.7 MMT.
• In other news, Argentina’s Ag. Ministry estimates October soybean crush at 1.9MT, with cumulative 2023 (Jan/Dec) volumes at 23.3MT.
• Cumulative soymeal production estimated at 16.9MT.

Europe

European wheat prices fell to a near two-year low, on Friday.

• The euro’s strength has been a depressing factor, making European exports more expensive.
• Two traders also said that Chinese importers had asked sellers of French wheat for December shipment to delay shipments to February and March in the new year.
• If true, some silo operators in France could have difficulty in this as they had scheduled the China sales to clear capacity.
• Poland’s wheat export shipments were busy, largely of old business, including a rare shipment of 25,000 tons of wheat from Szczecin to Albany, in the United States.
• However, prices fell amid a lack of new demand and a strong local currency, with wheat with 12.5% protein content dropping by 30 zloty on the week to around 935 zloty (213.6 euros) a ton for November/December port delivery.
• Domestic demand in Poland is weak, while grain stocks are high, with a lot of demand from Germany and the Netherlands covering now by Ukrainian grains.
• Polish truck drivers are blockading three border crossings with Ukraine, but nevertheless there is some impact on the grains business, as Ukrainian grains transited to export ports and the west EU, though there are not sold inside Poland.

Ukraine

Ukraine's grain exports have fallen to around 12.7 million metric tons so far in the 2023/24 July-June marketing season, agriculture ministry data showed.

• The volume exported this season includes 5.8 million tons of wheat, 5.9 million tons of corn and 870,000 tons of barley.
• The ministry also said traders had exported 3.45 million tons of grain so far in November.

Ukraine will receive boats to escort vessels along the grain corridor, President Volodymyr Zelensky announced, following an agreement with several countries regarding the transfer of naval boats.

Meantime, the European Commission will allocate 50 million euros to restore Ukrainian ports affected by Russian attacks, the President of the European Commission Ursula von der Leyen announced on Twitter.

Russia

The Russian government has significantly lowered the wheat and corn export taxes for the week of November 29-December 5.

• The export tax on wheat was trimmed from 4,395.4 ruble/MT ($49.26/MT) to 3,820.2 rubles/MT ($42.82/MT) for the week that ends on December 5.
• Barley continues without duty, and the export tax on corn is set at 642 rubles/ton (1,013.1).
• Russian sunoil export tax will be still zero by Dec23 to exhaust current significant exportable surplus.
• Sunmeal export tax will be lowered to 3312,70 RUB/mt vs 5773,10 RUB/mt of Nov23.
• As noted in the ministry, the duty rate for sunflower oil in December was calculated at an indicative price of 783.9 USD/t.
• The December duty on the export of sunflower meal is calculated at an indicative price of 232.8 USD/t.
• Please note that USD/RUB parity is around 88.73 right now.

China

China’s oilseeds processing was a record in 2022/23 marketing year and amounted to 133 mln tons.

• This was driven by a significant recovery in vegetable oil imports to 12.69 mln tonnes and continued growth in demand for meal.
• As for the supply of crushing industry in China, soybeans are the most dependent on imports among the major oilseeds.
• In the season 2022/23, China’s soybean production will reach 20 mln tonnes, while imports will reach 100 mln tonnes.
• 83% of the supply (excluding initial stocks) will be imported, with the main suppliers and competitors of the product being the US and Brazil.

Southeast Asia

Malaysian palm oil prices posted their first weekly drop in three as the contract fell for a second session on Friday, weighed down by weakness in Dalian vegetable oils and a better-than-expected output estimate.

• Dalian’s most active soyoil contract fell 1.02%,while its palm oil contract plunged 1.64%.
• The Malaysian Palm Oil Association estimated the output for Nov.1- Nov.20 to have dropped 3.89% from the previous month.
• Malaysia maintained its December crude palm oil export duty at 8%, a circular on the Malaysian Palm Oil Board website showed.
• The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 1.54% for the session and 1.04% for the week.
• However, market participants are still cautious about the rainy season.

This morning, Malaysian palm oil prices touched a near two-week low, tracking losses in crude and rival Dalian oils although losses were capped by improving exports.

Australia

Rain across south-eastern Australia has halted harvest for some growers, and sparked concerns about downgrading if this week brings further falls as forecast.

• Many South Australian farmers have had their earliest ever start to harvest, with yields meeting or slightly exceeding expectations, according to the latest South Australian Crop and Pasture Report.
• Based on conditions as of November 14, the Primary Industries and Regions SA report said in a statement released on Friday that SA’s crop production for the current harvest is estimated at 9.2 million tonnes (Mt), up from 9Mt previously forecast in PIRSA’s September report.
• Deliveries in the current harvest to bulk handlers GrainCorp have hit 4.79 million tonnes (Mt), the major eastern Australian bulk handler said in its latest weekly Harvest Update. This follows deliveries of 842,600t in the week ending Nov 26.
• Meantime, Friday’s ASX wheat firmed slightly as wet weather caused some concern around the quality profile.
• Rainfall totals for the week ending 26 November have been significant across large parts of NNSW and Qld with 50-100mm falling over the past week and isolated pockets receiving 100-20mm.
• With more rainfall expected this week the timing is not great.

International grain and oilseed tenders & trade

• South Korea’s Feed Leaders Committee (FLC) purchased around 50,000 metric tons of animal feed corn in a private deal past week without issuing an international tender. The corn was believed to have been purchased at an estimated $260.90 a ton c&f with an additional $1.50 a tonne surcharge for additional port unloading. Seller was believed to be trading house Mitsui.

Outside markets ...

Energy markets

Oil prices settled lower on Friday as the release of some hostages in Gaza reduced the geopolitical risk premium, but prices notched their first week of gains in over a month ahead of next week's OPEC+ meeting to decide on production cuts in 2024.

• The OPEC+ surprised the market on Wednesday by delaying its Nov. 26 to Nov. 30 after producers struggled to reach a consensus on output levels.
• However, the goup has moved closer to a compromise with African oil producers on 2024 output levels, and the most likely outcome now appears to be an extension of existing cuts.
• The surprise delay had initially brought Brent futures down as much as 4% and WTI by as much as 5% in intraday trading on Wednesday.
• A bright spot came in the form of the near-term economic outlook in China, as recent Chinese data and fresh aid to the indebted property sector can be "positive for the oil market's near-term trend".
• Yet those gains were capped by higher U.S. crude stockpiles and poor refining margins, leading to weaker demand from U.S. refineries.
• Still, China's longer-term outlook remains lukewarm.
• On the other hand, non-OPEC production growth is set to remain strong, with Brazilian state energy company Petrobras planning to invest $102 billion over the next five years to boost output to 3.2 million barrels of oil equivalent per day (boepd) by 2028, up from 2.8 million boepd in 2024.

This morning, oil prices slipped, with Brent falling toward $80 a barrel, as investors awaited the OPEC+ meeting later this week for an agreement to curb supplies into 2024.

• Ahead of the OPEC+ meeting, estimated exports by OPEC countries have declined to 1.3 million barrels per day below levels in April, Goldman Sachs analysts said.
• However, the United Arab Emirates is set to ramp up exports of flagship Murban crude early next year.
• The International Energy Agency said it expects a slight surplus in global oil markets in 2024 even if the OPEC+ nations extend their cuts into next year.
• Oil prices have also stabilised after geopolitical tensions dialled down in the Middle East following a ceasefire in Gaza and an exchange of hostages and prisoners.

Ocean freight markets

The Baltic Exchange's main sea freight index in London jumped on Friday posting its third straight weekly gain as rates strengthened across all vessel segments.

• The overall index gained 13.3% for the session, and 15.5% for the week.
• The capesize index surged 26.4%, posting a 22.5% weekly gains.
• The panamax index rose 1.5%, and gained over 10% for the week.
• The supramax index was up 1.1%, and was up about 6% in the week.

Equity markets

US stock indexes settled mixed Friday in a holiday-shortened session, with the Dow Jones Industrials climbing to a 3-1/2 month high.

• The S&P 500 inched up 0.1%, the Dow Jones Industrial Average added 0.3%, and the Nasdaq composite slipped 0.1%. All three indexes notched their fourth consecutive weekly gains.
• Oil prices continued to ease, with U.S. crude sliding 2%.
• The U.S. Nov S&P manufacturing PMI fell -0.6 to 49.4.
• The Nov S&P services PMI unexpectedly rose +0.2 to a 4-month high of 50.8.
• Bank of America said EPFR Global data showed global stock funds saw inflows of about $49 billion in the two weeks through Nov 21, the most in 1-3/4 years.
• According to Investment Company Institute data, about $29.1 billion flowed into U.S. money-market funds in the week through Nov 21. Total assets in money-market funds increased to a record $5.763 trillion from $5.734 trillion the week prior.
• A jump in bond yields limited the upside in stocks, as the 10-year US T-note yield rose to a 1-week high of 4.490% and finished up +6.3 bp at 4.467%.

This morning, Asian shares retreated, as investors awaited updates on consumer spending and inflation in the U.S. and other nations.

• Japan’s benchmark Nikkei 225 dipped 0.5%, after the producer price index in October came in a little higher than expected, at 2.3%. Hong Kong’s Hang Seng dropped 0.3%, while the Shanghai Composite lost 0.4%. Australia's S&P/ASX 200 edged down 0.8%. South Korea's Kospi shed less than 0.1%.
• In China, industrial profits declined 7.8% in January-October compared with the year before, though they rose 2.7% in October, for a third monthly year-on-year increase.
• Several central banks in the region are holding policy meetings this week, including the Reserve Bank of New Zealand, Bank of Korea and Bank of Thailand.

Currency trading

The dollar index fell, with the dollar retreating Friday's after economic news.

• The index eased 0.4 % to 103.35, staying close to the 2-1/2 month low of 103.17 touched earlier in the week.
• For the week, the index was down 0.5%, after slipping 1.9% a week earlier.
• The U.S. Nov S&P manufacturing PMI fell more than expected.
• The Nov S&P services PMI unexpectedly rose to a 4-month high, instead declining.
• Strength in the euro Friday weighed on the dollar after the German Nov IFO business climate rose more than expected to a 4-month high.
• In addition, Friday’s jump in the 10-year German bund yield to a 1-1/2 week high strengthened the euro’s interest rate differentials and supported the euro.
• Strength in the euro was limited by Friday’s dovish comments from ECB President Lagarde, who signaled she supports a rate hike pause by the ECB.
• The USD/JPY fell, and the yen posted modest gains against the dollar, after Friday’s Japanese consumer price news showed price pressures remain above the BOJ’s 2.0% target

This morning the U.S. dollar inched down to 148.97 Japanese yen from 149.53 yen. The euro cost $1.0955, up from $1.0944.

Settlement prices for key commodity, index and currencies

• Chicago wheat Dec contract was down 7c/bu to 548.6c/bu;
• Kansas wheat Dec contract was down 12.4c/bu to 602c/bu;
• Minneapolis wheat Dec contract was down 14c/bu to 696.6c/bu;
• MATIF wheat Dec contract, was down €3/t to €219/t;
• ASX wheat Jan '24, was up A$1.5/t to A$390/t;
• Black Sea wheat Dec contract has not quoted since August 11, 2023;
• US DWI Cash (durum wheat index) was down 13.13c/bu to 911.25c/bu;
• 1CWAD (Canadian durum wheat) avg spot prices was down C$1.07/t to C$464.10/t;
• EDW (EU durum) Dec contract, was unchanged to €390.5/t;
• Chicago corn Dec was down 5.4c/bu to 463.2c/bu;
• MATIF corn Mar was down €1/t to €204.75/t;
• Chicago soybeans Jan down 25.6c/bu to 1330.6c/bu;
• Winnipeg canola Jan down C$1.4/t to C$695.3/t;
• MATIF rapeseed Feb contract, was up €1.25/t to €438/t;
• Brent crude Jan was down US$0.85 per barrel to $80.58;
• WTI crude Jan was down US$1.56 per barrel to $75.54;
• BADI (Baltic Dry Index) was up 247 points to 2.102;
• Dow Jones was up 117.12 points to 35.390,15;
• S&P 500 was up 2.72 points to 4.559,34;
• NASDAQ Composite down 15.00 points to 14.250,85;
• US dollar index (Dec '23) was down 0.521 points to 103.304;
• AUD/USD firmer at US$0.6579;
• USD/CAD weaker at $1.3625;
• EUR/USD firmer at $1.0933;
• USD/RUB firmer at ?89.2908.

That's all, thank you.

We wish you a nice day.

Author:?Sandro F. Puglisi

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