September 27, 2024 - Newswires

Grain prices faced moderate cuts, following the rally ...

Good morning, Farmer Family ...

US farm markets suffered a setback, on Thursday.

Corn prices dropped 0.48%.

Soybeans lost 1.16%.

The rest of the soy complex also was in the red, as soymeal dipped 0.58%, while soyoil slumped 3.29% lower.

Wheat prices faced variable cuts, as Chicago SRW fell 0.85%, Kansas City HRW eased 0.34%, and Minneapolis spring wheat lost 0.89%.

• Corn fell on lackluster weekly export numbers.
• Soybeans faced an extremely volatile day of trading, touching a new two-month peak before ending lower, amid questions over export demand and late-season drought impacts on U.S. crop yields.
• Wheat prices fell as lackluster weekly export sales weighed on prices and traders adjusted their positions ahead of two key government reports out on Monday.
• Notably, USDA’s Export Sales report tallied just 535,056 MT of corn in 2024/25 bookings during the week that ended on September 19.
• That was below the 0.6 to 1.3 MMT estimates and down 37% from both last week and the same week last year.
• Supporting corn prices, another private export sale of 115,000 MT of corn was reported to Mexico by the USDA via their daily reporting system.
• For soybeans, the report showed 1.574 MMT of soybeans sold in the week that ended on September 19, a drop from the previous week.
• That was in the middle of the 0.9 to 2 MMT estimates and well above the same week last year.
• Meal sales were net reductions of 7,944 MT for 2023/24 sales and net sales of 271,984 MT for 2024/25, coming in the middle of the 100,000 and 550,000 MT estimates for the two marketing years.
• Bean oil sales were 935 MT for 2023/24, with 3,489 MT in 2024/25 sales, barely in the range of 4,000 to 26,000 MT in total sale estimates.
• For wheat, all wheat 2024/25 export sales came in at a MY low of 158,938 MT, which came in below the 200,000 to 600,000 MT estimates during the week of September 19.
• Sales for 2025/26 were tallied at 10,000 MT, in the range of the expected 0 to 50,000 MT.
• News that China may inject $1 trillion into its economy gave the grains and oilseed markets some support early in the session, but traders said it was still unclear how that would impact country's consumer demand in the near-term.
• The soy market in recent months, has been affected by a substantially absence of demand for the US origin.
• Sharp losses in crude oil have been an additional pressure factor.
• Meantime, traders were looking ahead to Monday's U.S. Department of Agriculture's annual small grains summary and quarterly grain stocks reports.
• Speculators were also positioning ahead of the end of the month and quarter end, putting a cap on grain and oilseed market interest for much of the session.

In this context ...

Basis bids for soybeans were mixed at U.S. elevators and processors, as farmers hedged more of their crops. Meanwhile the corn basis was mixed.

• Farmer selling seems more tilted toward soybeans than corn this week, with the soy harvest accelerating in the western Midwest.
• The soy basis eased at river locations near Morris, Illinois, and Davenport, Iowa, and at a Sioux City, Iowa, crush plant.
• Basis rose at a processor in Lafayette, Indiana, and at elevators around Chicago.
• Basis bids for corn were up 3 cents at the Cincinnati elevator and down 3 cents at an ethanol plant in Council Bluffs, Iowa.
• Basis offers for soymeal in U.S. truck and rail markets began rolling to Chicago Board of Trade December soymeal futures from the October contract.
• Facilities rolled their soymeal basis offers as the most-active December contract is trading above nearby October futures.
• Supplies are tight in certain areas as processors wait for more of new soybean crop to be harvested.
• Commodity funds were net sellers in CBOT wheat, soybean, soymeal, soyoil, and net buyers of corn contracts.

This morning ...

Wheat prices slid, as dismal demand for U.S. cargoes weighed on prices, although the market was on track for a weekly gain. Soybeans ticked higher and corn prices eased, but both markets were set to end the week on a positive note.

• Notably, the most-active wheat contract on the Chicago Board of Trade slid 0.8%, as of 0237 GMT, soybeans rose 0.1%, and corn shed 0.4%.
• For the week, wheat has climbed 2% after losing ground last week, while soybeans have gained almost 3% and corn is up 2.5%.

South America

Argentina

Argentina's Buenos Aires grains exchange could cut its forecast for the size of fields planted with corn this season if the South American nation's farming heartlands do not receive rain in the coming weeks, it said on Thursday.

• The exchange currently predicts that farmers in Argentina will plant some 6.3 million hectares of corn for the 2024/25 season.
• It also forecast a 47 million metric ton harvest.
• So far, corn farmers have sown just 10.5% of the expected area.
• The exchange also said that recent rains was favoring wheat, and on Wednesday bumped up its harvest estimate to 18.6 million tons.
• Farmers will begin the wheat harvest in November.

South Africa

South African farmers are expected to harvest 22% less maize in the 2023/2024 season compared with the previous one, the government's Crop Estimates Committee (CEC) said on Thursday.

• The CEC's eighth summer crop forecast estimated the 2024 harvest at 12.8 million metric tons, down from 16.43 million tons harvested the season before.
• The previous estimate on Aug. 28 put the 2024 maize harvest at 13.06 million tons.
• The harvest is expected to consist of 6.08 million tons of white maize, for human consumption, and 6.72 million tons of yellow maize, used mainly in animal feed.

Europe

European grain markets ended mixed.

• December wheat on Paris-based Euronext settled 0.3% up at 221.25 euros ($247.18) a metric ton.
• The contract earlier rose to its highest in over a week at 223.75 euros before paring gains, and turning lower.
• MATIF corn Nov contract ended €1/t higher to €206.75/t, while rapeseed was down €5/t to €475/t, by the close.
• Wheat prices ticked up, with support from weather risks for planting.
• Concern over drought in the Black Sea region has been amplified after Sovecon said the winter wheat sowing progress in Russia has fallen to an 11-year low.
• Heavy rain in parts of the European Union was also starting to raise doubts about sowing conditions.
• Talk that Russia may impose export quotas from February, renewed hope for better EU wheat export sales in the first half of 2025.
• However, forecasts of rain relief in western Ukraine tempered worries about Black Sea sowing.
• Also, European prices are remaining pressured by aggressively priced Black Sea origin exports.
• Euronext is rising despite the lackluster demand.
• Meanwhile Russian exports is being shipped out in very large volumes and export prices are remaining at low levels.
• Corn, for its part, followed wheat higher.
• Grain markets were also awaiting further direction from quarterly U.S. grain stocks estimates due on Monday.
• As for oilseeds, following a 3% drop in crude oil prices, rapeseed has been one of the first to suffer, declining 5 €/t by the close.
• Meantime, grain maize harvest had risen to 1% by Sept. 23 from 0% a week earlier but was down from 10% a year earlier, farm office FranceAgriMer said on Friday.
• Some 79% of French grain maize was rated as in good or excellent condition, down from 80% a week earlier and down from 82% a year earlier.
• FranceAgriMer estimates 1% of soft wheat, 1% of durum wheat and 2% of winter barley had been sown by Sept. 23, all up from 0% a year earlier.

Ukraine

Ukraine had harvested around 34.3 million metric tons of grain from 71.5% of the sown area as of Sept. 26, agriculture ministry data showed.

• The harvest included 22.3 million tons of wheat, 5.5 million tons of barley, 465,300 tons of peas, and 4.7 million tons of corn.
• The ministry said 6.66 million tons of sunflower, 3.46 million tons of rapeseed and 3.5 million tons of soybeans had also been harvested.
• Meantime, there has been a slight revival in the market of agro-export of Ukrainian products by road, caused by the beginning of the harvesting campaign, Spike Brokers reported on Sep 25.
• Notably, over the last week from Ukraine was exported by road transport 81.5 thousand tonnes of agricultural products.
• Reduction of exports on the Moldovan border is fixed - 12.99 thousand tonnes, which is 7% less compared to the previous week.
• At the same time, at the Romanian and Hungarian borders, there is an increase in exports by 14% and 11% respectively, reaching 20.3 thousand tonnes and 8.3 thousand tonnes respectively,’ the report says.
• As for transportations through the Polish border, during the week their volume increased by 6%, up to 33.6 thousand tonnes.
• At the Slovak border, this growth is estimated at 5%, up to 6.25 thousand tonnes.
• Cumulative export volumes however remained stable, though with some change with border countries.
• The increased demand caused an increase in freight rates to Europe by EUR 5 on average, while domestic rates remain at the level of the previous week,’ experts add.
• As for the specific size of the rates, when transporting agricultural products from the west of Ukraine, as of September 18, they were: to Central and Northern Italy - 115-135 EUR, to the centre of Bulgaria - 85-110 EUR, to the east of Germany - 110-130 EUR, to the south of Poland (tank trucks) - 60-80 EUR.
• For road transport from the centre of Ukraine the indicated rates are as follows: south of Romania - 75-100 EUR, north of Italy (tank trucks) - 150-180 EUR, Ukrainian Danube ports - $37-42, Great Odessa ports - $25-32.

Russia

Russia's IKAR agricultural consultancy has cut its forecast for Russia's wheat crop to 81.8 million metric tons from 82.2 million tons and for the grain crop to 124.5 million tons from 125 million tons, it said on Thursday.

• The main reason for the lower forecasts was damage to crops in eastern regions of Russsia due to waterlogged soil.
• In September, five regions in Siberia declared a state of emergency due to problems with crops caused by heavy and prolonged rainfall.
• IKAR, however, maintained its forecast for wheat exports in the 2024/25 season at 44 million tons, and for total grain exports at 53 million tons.
• By September 23, Russian agrarians had threshed 78% of sown areas and harvested 105.9 mln tonnes of grain, including 77.7 mln tonnes of wheat, per latest data from the Russian Agriculture Ministry.
• As of last Monday, 10.6 mln hectares of grain crops remained to be harvested, of which 8 mln hectares were in the Volga, Urals and Siberian federal districts.
• The Ministry of Agriculture also stressed that by the end of this week the regions should send harvest estimates to the ministry in order to adjust the forecast of grain production in 2024, which is still 132 mln tonnes.
• Meantime, Russian Grain Union has resumed the publication of consensus forecasts of the gross harvest of Russian grain in 2024, as well as its exports in the current season.
• On this wake, the current consensus forecast of the total gross grain harvest is currently 125.9 mln tonnes, which is 0.5% lower than the previous estimate made on 21 June.
• At the same time, for wheat this estimate for the period increased by 5.2% to 83.4 mln tonnes, while for barley it decreased by 3.3% to 17.8 mln tonnes.
• The consensus forecast for corn harvest fell the most, down 14.8% to 12.7 mln tonnes.
• The estimate for the harvest of other crops is 12 mln tonnes, down 5.5%,’ Union Chairman Eduard Zernin clarified.
• On the exports side, grain exports in MY 2024/25 are estimated at 53.3 mln tonnes (0.4% lower than the June estimate).
• However, the consensus forecast for wheat is 8.7% higher at 43.5 mln tonnes.
• Barley exports are forecast at 3.9 mln tonnes (9.3% lower).
• The biggest decline is in the estimate for corn exports, which is down by an immediate 44% to 2.8 mln tonnes.
• Meantime, traders said 12.5% Russian October shipment wheat was quoted at $215-$218 a ton FOB, with 11.5% Russian at around $211-$214.

China

China's agriculture ministry issued a plan to stabilise the production of beef and dairy products.

• The plan, posted on the website of the Ministry of Agriculture and Rural Affairs, calls to support farmers by offering reasonable loan extensions and renewals for those facing temporary difficulties.
• It would also effectively reduce feed costs for farming households.
• All localities would be required to speed the implementation of basic cow herd expansion and quality improvement.
• China would eventually introduce more targeted support policies to help agriculture and enterprises in accordance with the actual situation, the notice said.
• Meantime, the country has set its wheat import tariff quota for 2025 at about 9.64 million metric tons, the state planner said.
• It also set the 2025 import tariff quota for rice, corn and cotton at 5.32 million tons, 7.2 million tons and 894,000 tons, respectively.

Southeast Asia

Malaysia

Malaysian palm oil prices surge 2%, hitting a five-month high by the close.

• Notably, the benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 2.7%, the highest close since April 15.
• The contract has risen 11% over the last seven sessions.
• High demand from India and worries about production supply inmajor palm-producing countries, supported the market.
• The ringgit weakened 0.31% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.
• Meantime, Dalian's most-active soyoil contract rose 1.19%, while its palm oil contract added 1.79%.
• However, there has been weaker demand for biofuels in certain regions due to falling crude oil prices.
• Oil prices slumped, and weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
• Thus, a decline in energy prices can reduce demand for vegetable oils.

Australia

Australian grain production has been hit by frost.

• Damage is still be reconciled but crops in South Australia, Victoria and New South Wales have been unquestionably affected.
• According to the USDA, production estimates are north of 25 million tonnes, predicting 75-78 percent will be available to the export market.
• However, given the impact to SA and Vic, and the supply chain challenges associated with having a bunch of production in northern NSW and southern Qld, this percentage will be pressured, and will potentially reduce tonnage available to major exporters.
• In this context, domestic values are reflecting the concern, with the delivered Melbourne bid at A$370/t for delivery January onward. ?
• Queensland and northern NSW are set for a bumper crop, with early sorghum adding to the feedgrain balance sheet.
• Meanwhile, ASX Jan 2025 wheat was up A$4/t to $334/t, yesterday, while ASX Jan 2025 barley ended up A$2.50.t to $288.50/t.

International grain and oilseed tenders & trade

• WHEAT SALE: Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 112,580 metric tons of food-quality wheat from the United States, Canada and Australia in a tender seeking the same volume which closed on Sept. 25.
• CORN TENDER: South Korea's Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 metric tons of animal feed corn to be sourced from either South America or South Africa only. The deadline for submission of price offers in the tender is Sept. 27.
• BARLEY TENDER: Jordan's state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley with an Oct. 2 deadline.
• FAILED BARLEY TENDER: Iranian state-owned animal feed importer SLAL is believed to have made no major purchase in a tender which closed on Sept. 24 for 120,000 tons of animal feed barley.
• PENDING TENDERS:
• CORN TENDER: Algerian state agency ONAB has issued an international tender to purchase around 240,000 metric tons of animal feed corn sourced from Argentina or Brazil only. The deadline for submission of price offers in the tender is Sept. 26.
• WHEAT TENDER: 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 Oct. 1.

Outside markets ...

Energy markets

Oil prices fell about 3%.

• Brent crude futures settled down 2.53%, while U.S. West Texas Intermediate crude finished down 2.90%.
• Financial Times reported that Saudi Arabia will give up its $100 price target in preparation for raising output, along with OPEC+ in December.
• The OPEC+ have been cutting oil output to support prices.
• However, prices are down nearly 6% so far this year, amid increasing supply from other producers, especially the U.S., as well as weak demand growth in China.
• Also, a United Nations statement on Wednesday said delegates from Libya's divided east and west regions agreed on the process of appointing a central bank governor.
• News of a new Chinese stimulus package, limited further losses.

This morning, oil prices edged higher, recouping some losses.

• Brent crude futures were up 0.21%, as of 0630 GMT, while U.S. West Texas Intermediate crude futures were up 0.27%.
• However, both benchmark stayed on track for a weekly fall, as Brent crude has shed about 3.7% so far this week, while WTI was on track to slide nearly 5.7%.
• China's central bank on Friday lowered interest rates and injected liquidity into the banking system as Beijing assembled a last-ditch stimulus assault to pull economic growth back towards this year's roughly 5% target.
• More fiscal measures are expected to be announced before China's holidays starting on Oct. 1, after a meeting of the Communist Party's top leaders showed an increased sense of urgency about mounting economic headwinds.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London rose to its highest in close to three months, propelled by higher rates in the capesize vessel segment.

• Notably, the overall index rose 3.72%, hitting its highest level since July 2.
• The capesize index jumped 7.99%, its highest level since early July.
• The panamax index was down 2.9%.
• The supramax index was down 0.23%.

Equity markets

Us stock indexes rallied, with the S&P 500 setting an all-time high for the third time this week and the 42nd time this year.

• The Dow Jones Industrial Average gained 0.6%, the S&P 500 added 0.4%, while the Nasdaq composite rose 0.6%.
• Global equity markets had carryover support from Thursday’s +3% surge in Chinese stocks after the government leaders pledged to support fiscal spending and revive economic growth.
• Strength in chip stocks also led the overall market higher.
• Micron Technology closed up more than +14%, Jabil climbed 11.7%.
• Stocks maintained their gains on signs of resilience in the US labor market.
• US weekly initial unemployment claims indeed unexpectedly fell -4,000 to a 4-month low of 218,000.
• Stock indexes, however, fell back from their best levels as T-note yields rose on the better-than-expected US Q2 GDP and weekly jobless claims reports.
• US Q2 GDP indeed was left unrevised at +3.0% (q/q annualized).
• US Aug capital goods new orders nondefense ex-aircraft and parts rose +0.1% m/m.
• US Aug pending home sales rose +0.6% m/m.
• The 10-year T-note yield rose +0.8 bp to 3.793%.
• Meantime, energy stocks were under pressure after WTI crude oil fell more than -2% to a 2-week low.
• In Europe, the Euro Stoxx 50 climbed to a 2-1/4 month high and closed up +2.35%.
• Eurozone Aug M3 money supply rose +2.9% y/y.
• The German Oct GfK consumer confidence index unexpectedly rose +0.7 to -21.2.
• In China, the Shanghai Composite Index rallied to a 2-3/4 month high and closed up by +3.61%.
• Japan's Nikkei Stock 225 rose to a 3-week high and closed up +2.79%.

This morning, stocks in Asia advanced, led by gains in Hong Kong and other Chinese markets fueled by China's moves to rev up its economy.

• The Hang Seng in Hong Kong advanced 3.12%, the Shanghai Composite index jumped 2.88%, Japan’s Nikkei 225 index was up 2.32%, Australia’s S&P/ASX 200 added nearly 0.1%, South Korea’s Kospi shed 0.82%.

Currency trading

The dollar index fell, as the dollar was under pressure after the Chinese yuan rose to a 16-month high against the dollar.

• Chinese government boosted stimulus measures supporting the yuan.
• Also, a rally in stocks curbed liquidity demand for the dollar.
• Losses in the dollar were limited on stronger-than-expected US weekly jobless claims and Q2 GDP reports, that pushed T-note yields higher.
• US Aug capital goods new orders nondefense ex-aircraft and parts were right on expectations.
• Conversely, US Aug pending home sales were weaker than expectations.
• Meantime, the EUR/USD rose, with the euro finding support from an unexpected increase in the German Oct GfK consumer confidence index.
• Limiting gains for the euro the Eurozone Aug M3 money supply rose more than expected, at the fastest pace in 19 months.
• On the other hand, the USD/JPY fell, with the yen recovering from a 3-week low against the dollar, due to the hawkish minutes of the BOJ’s July 30-31 policy meeting.
• The yen, however, initially has moved lower, based on expectations that Sanae Takaichi would be elected Liberal Democratic Party leader.
• Also, a sharp +2% rally in the Nikkei Stock Index to a 3-week high reduced safe-haven demand for the yen.

This morning, the U.S. dollar rose to 145.24 Japanese yen from 144.80 yen. The euro was trading at $1.1170, down from $1.1176.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Dec contract was down 5c/bu to 584.2c/bu;
• Kansas wheat Dec contract was down 2c/bu to 579c/bu;
• Minneapolis wheat Dec contract was down 5.4c/bu to 611.4c/bu;

• MATIF wheat Dec was up €0.75/t to €221.25/t;

• ASX wheat Jan '25 contract was up A$4 to A$334/t;

• US DWI Cash (durum wheat index) was unchanged to 622.97c/bu;

• 1CWAD (Canadian durum) avg spot price was up C$2.48/t to C$306.35/t.
• EDW (EU durum) Dec contract was unchanged to €319.75/t;

• Chicago corn Dec contract was down 2c/bu to 413.2c/bu;

• MATIF corn Nov was up €1/t to €206.75/t;

• Chicago soybeans Nov was down 12.2c/bu to 1,041c/bu;

• Winnipeg canola Nov contract, was down C$10.4/t to C$600.9/t;

• MATIF rapeseed Nov was down €5/t to €475/t;

• Brent crude Nov was down US$1.86/barrel to $71.60;

• WTI crude Nov was down US$2.02/barrel to $67.67;

• BADI (Baltic Dry Index) was up 75 points to 2.091;

• Dow Jones was up 260,36 points to 42.175,11;
• S&P 500 was up 23,11 points to 5.745,37;
• NASDAQ Composite was up 108,09 points to 18.190,29;

• US dollar index (Dec '24) was down 0.378 points to 100.246;

• AUD/USD firmer at US$0.6896;
• USD/CAD weaker at $1.3465;
• EUR/USD firmer at $1.1177;
• USD/RUB firmer at ?92.6103.

That's all, thank you.

We wish you a nice day.

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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