September 6, 2024 -Newswires

Soybeans extended gains, while corn and wheat paused ...

Good morning, Farmer Family ...

US farm markets ended mixed, mostly lower on Thursday.

Corn prices stumbled 0.48% lower.

Soybeans picked up 0.2%.

The rest of the soy complex was mixed as soymeal dipped 1.04%, while soyoil rebounded 2.38%.

Wheat prices were mixed mostly lower, as Chicago SRW fell 1.03%, Kansas City HRW dropped 0.72%, while Minneapolis spring wheat lifted 0.36%.

• Corn fell, as large U.S. yield prospects continued to drive short covering from earlier this week.
• Despite a dry end to the U.S. growing season and drought in Brazil that may hamper early planting, corn and soybean markets are expected to be well supplied.
• Delayed Weekly EIA data showed ethanol production at 1.061 million barrels per day in the week of 8/30.
• That was down 10,000 bpd from the week prior.
• Ethanol stocks dropped 218,000 barrels to 23.354 million barrels.
• Refiner inputs of ethanol were up 8,000 barrels to 933,000 bpd.
• Exports in that week were down 54,000 barrels per day to 91,000 bpd.
• Soybeans, meantime, were supported by news of fresh U.S. soybean export sales.
• The USDA indeed confirmed a couple private export sales of 2024/25 soybeans, with 126,000 MT sold to China and 189,700 MT to unknown destinations.
• A lower dollar and concerns over damaging, dry U.S. Midwestern weather had encouraged recent short-covering in grain markets where investors had built up big short positions.
• However, commodity funds added new short positions on Thursday on the perception that corn and soy had become over-valued.
• For wheat, prices fell on spillover weakness from corn and continued pressure from a stream of cheap Black Sea wheat exports.

• Ukrainian farmers could increase the winter wheat sowing area for the 2025 harvest to more than 5 million hectares.
• Strong Black Sea wheat supplies are likely to offset the weak harvest in France.
• The USDA Export Sales report concerning the week ending 8/29 has been delayed to Friday due to the Labor Day holiday.
• For corn, estimates are running net reductions of 100,000 MT to net sales of 200,000 MT for old crop.
• New crop is expected to be between sales of 0.7 to 1.4 MMT.
• For soybeans, traders are calling for net reductions of 200,000 MT to net sales of 200,000 MT for 2023/24.
• New crop sales are expecting to total 800,000 MT to 2 MMT.
• Meal sales are seen as totaling 150,000 to 650,000 MT in that week, with 0 to 20,000 MT for total soy oil sales.
• All wheat export business is expected to total 300,000 MT to 600,000 MT in that week.
• In other news, U.S. farm income will fall for a second consecutive year in 2024, but not as much as previously expected.
• Prices of livestock and egg products boomed and production expenses ease, the USDA said.
• Cash receipts for egg sales this year are expected to jump about 35%, or $6 billion - the largest increase in the livestock and animal products group, USDA data shows.
• Conversely, crop farmers are wrestling with corn and soybean prices hovering near four-year lows.
• However, the estimated decline is less steep than the agency's February forecast, which called for the largest recorded year-to-year drop in net U.S. farm income in 2024 on rising farm expenses.
• USDA indeed now estimates this year's net farm income, a broad measure of profitability in the agricultural economy, will hit $140 billion in 2024, down 4.4% or $6.5 billion from a year earlier.
• Adjusted for inflation, net farm income in 2024 is forecast to drop by $10.2 billion, or 6.8%, from a year earlier.
• In February, USDA had forecast that net farm income would fall more than 25%, or nearly $40 billion, from a year earlier.
• Meantime, traders are awaiting next week's U.S. Department of Agriculture supply and demand report and September crop estimates before making big moves.

In this context ...

Spot basis bids for corn in the U.S. Midwest were mostly steady to higher at elevators, processors and river terminals, as merchants awaited more new crop corn.

• Demand at the Gulf fueled rising corn basis numbers at river terminals.
• The corn basis rose by 7 cents at river terminals in Seneca and Savanna, Illinois.
• It rose by 3 cents at an elevator in Cincinnati and a processor in Cedar Rapids.
• The soybean basis fell at processors and river terminals in a spot check.
• The soy basis fell by 15 cents at a processor in Lafayette, Indiana and 5 cents in Council Bluffs, Iowa.
• It rose by 3 cents at a river terminal in Davenport, Iowa.
• Spot basis bids for hard red winter (HRW) wheat were unchanged in the southern U.S. Plains.
• Protein premiums for HRW wheat shipped by rail to or through Kansas City were unchanged for wheat with all levels of protein content.
• Merchants in Catoosa, Oklahoma said there had been some farmer selling in recent days that quieted down on Thursday.

This morning ...

Wheat, corn and soybean all eased.

• The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.6% by 0326 GMT, corn slipped 0.2%, while soybeans fell 0.3%.
• All three crops were nevertheless on track for weekly gains.
• Wheat was up 3.6% for the week, its second straight weekly increase.
• Corn was up 2.2% from last Friday's close, also its second weekly gain in a row, while soybeans were up 2.1% over the week for a third consecutive weekly rise.
• Traders believe that the fortnight-long rally which lifted prices from near four-year lows, has left contracts over-valued amid plentiful supply.
• The rallies were driven by speculators unwinding some of their hefty short positions.
• Also, on wheat, which has risen furthest of the three crops, there has not been enough new information to adjust supply expectations and sustain a rally.
• "We wouldn't be surprised if this move upwards was somewhat of a 'dead cat bounce' and we start to see some slippage in the coming days", Andrew Whitelaw at agricultural consultants Episode 3 in Canberra, said.

South America

Brazil

Brazil's soy planting area will increase in 2024/25 at its slowest pace in almost two decades due in part to low prices, agribusiness consultancy AgRural said

• Meantime, soybean exports out of Brazil in July totaled 8.04 MMT.
• That was a 6-month low and down 4.12% from last year.
• Brazilian corn export during August totaled 6.063 MMT.
• That was down from last year by 35.25% and was the lowest August total since 2020 and the second lowest out of the last 6 years.

Argentine

Argentina's main breadbasket will likely face dry weather over the next week after rain storms last weekend brought relief to some farmland, the Buenos Aires Grains Exchange said.

• Due to months of insufficient rainfall over western and northern areas of the country's main agricultural area, the exchange said in a report it expects impacts to the wheat crop as well as difficulties with early corn planting.
• A large part of the southern cone is expected to see scarce precipitation of less than 10 millimeters, with some areas likely to receive more moderate rainfall.
• Rains last weekend provided between 40 to 50 millimeters of precipitation in eastern and southern parts of the core farmland, providing a needed boost to corn planting, which begins this month.
• Farmers are expected to plant 6.3 million hectares with corn this 2024/25 season.
• The Exchange said that corn planting for the 2024/25 crop has started, with 1% of the area planted.
• According to the Exchange, the condition of wheat crops, however, has improved due to recent rains.
• Nearly 50% of wheat crops now have optimal or sufficient moisture, up from 46% two weeks ago.

Europe

European grain markets ended mixed.

• December wheat settled 0.9% lower to 218.50 euros ($242.56) per metric ton, ending a run of seven daily gains.
• The contract had earlier climbed to 222.25 euros, just above a previous three-week high set on Wednesday but like a day earlier failed to break clear of chart resistance around 220 euros.
• MATIF corn Nov ended down €1/t to €202.75/t, while rapeseed rebounded €7/t to end at €473.5/t.
• Wheat prices turned lower, after reaching a new three-week peak as a short-covering rally in Chicago faltered.
• The euro returned to its highest level in a year, trading above 1.1100.
• Also, competition from cheaper Black Sea supplies lingered, and some are asking if recent Euronext rises can hold in the face of hard price competition with that origins.
• In oilseeds, November rapeseed ended 1.5% up at 473.50 euros a ton, after touching a one-month high, as Canadian canola steadied following losses this week triggered by a Chinese anti-dumping probe.

Ukraine

Ukraine had harvested almost 35 million metric tons of grain and oilseeds as of Sept. 5, agriculture ministry data showed.

• The data showed the output included 21.9 million tons of wheat, 5.5 million ton of barley, 458,000 tons of corn, 3.4 million tons of rapeseed.
• The ministry has said it saw the 2024 corn harvest at about 25 million tons while wheat crop could total 21.8 million tons.
• The ministry has raised its forecast for the 2024 grain harvest to 56 million tons from 52.4 million tons.
• Together with oilseeds, the crop could total 77 million tons, it said.
• Meantime, Ukraine's grain exports in the 2024/25 July-June season had reached 7.5 million metric tons as of Sept. 6.
• The volume included 4 million tons of wheat, 2.4 million tons of corn and 1.1 million tons of barley.
• The ministry said traders have exported 536,000 tons of grain so far in September.
• Ukrainian grain traders union UGA said this week that combined grain and oilseed exports had risen to 4.3 million tons in August.
• UGA, meantime, criticized national railway company Ukrzaliznytsia's plans to raise grain transport tariffs, saying it could only worsen the situation for farmers suffering from falling global food prices.
• "UGA believes that Ukrzaliznytsia's proposed 11% increase in tariffs for grain transport will hit Ukrainian farmers, who are suffering losses due to the war, lower world grain prices and worsening crop yields this year," the union said in a statement.
• Ukrzaliznytsia has said it plans to unify Ukrainian transport tariffs and it could raise them by around 7%.

Russia

Despite worries about poor harvest weather in some Russian regions, Russian export shipments remain very large and are expected to remain big in the rest of September.

• Analysts said Russian wheat exports in August hit a record high ever.
• According to the IKAR, Russia exported almost 5.5 mmt of wheat last month.
• September wheat export could be high too.
• IKAR expects a range between minimum 4.8 mmt up to 5.3 mmt, in September.
• Meantime, Russian 12.5% protein wheat was on Thursday quoted at about $215-$217 a ton FOB for September/October Black Sea shipment.
• Russian 11.5% protein wheat was quoted at about $208-$212 a ton FOB for September.

Southeast Asia

Malaysia

Malaysian palm oil prices rose, reversing losses early in the session.

• The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange went up 0.85%.
• Lower trading volumes and worries over poor production expectations in the fourth quarter this year, supported the market.
• Meantime, Dalian's most-active soyoil contract fell 0.88%, while its palm oil contract was down 0.53%.
• Indonesia plans to lower export levy rates of the tropical oil to improve competitiveness against rival vegetable oils and raise farmers' income.
• Malaysia's palm oil inventories are expected to have climbed to their highest levels in six months at the end of August.
• Exports of Malaysian palm oil products for August fell about 10%, cargo surveyors said.
• Also, the Malaysian ringgit gained 0.33% against the dollar, making palm oil less attractive for foreign currency holders.

Australia

Patchy rain has fallen this past week in southern areas of Vic, SA and coastal WA, with totals in the range 10-50mm. Elsewhere cropping areas have been dry, receiving less than 5mm.

• Light falls up to 10mm are forecast over the next eight days for Qld and WA, 10-25mm in NNSW and Vic/SA 15-50mm.
• Meantime, canola dropped yesterday in the west with a fall of $10-15/t in most port zones.
• WA barley prices remained steady, while wheat bidding firmed by $2-5/t.
• In the east, we saw a similar drop in canola prices and slight uptick in wheat.
• In parts of NSW we also saw an increase in barley prices.

International grain and oilseed tenders & trade

• N.A..

FAO Food Price Index - September 2024 Update

The United Nations' world food price index eased slightly in August.

• Notably, the price index slipped to 120.7 points in August from a revised 121 in July.
• The August value was 1.1% lower than its level a year ago and 24.7% below its peak from March 2022.
• Lower prices for sugar, meat and cereals more than offset higher dairy and vegetable oil prices.
• The FAO Cereal Price Index averaged 110.1 points in August, down 0.6 points (0.5 percent) from July and 14.9 points (11.9 percent) from its August 2023 value.
• The FAO All Rice Price Index increased by 0.6 percent in August.
• The FAO Vegetable Oil Price Index averaged 136.0 points in August, up 1.0 point (0.8 percent) month-on-month and attaining the highest level since January 2023.
• The FAO Dairy Price Index averaged 130.6 points in August, up 2.8 points (2.2 percent) from July and standing 16.3 points (14.2 percent) above its corresponding value a year ago.
• The FAO Meat Price Index averaged 119.5 points in August, down 0.9 points (0.7 percent) from July, but still standing 4.3 points (3.7 percent) above its corresponding value last year.
• The FAO Sugar Price Index averaged 113.9 points in August, down 5.7 points (4.7 percent) from July and as much as 34.3 points (23.2 percent) from its value a year ago, reaching its lowest level since October 2022.

FAO Cereal Supply and Demand Brief - September 2024 Update

In a separate report, the FAO lowered its forecast for global cereal production in 2024 by 2.8 million metric tons to 2.851 billion tons, putting it almost on a par with the previous year's output.

• The decrease largely reflects reduced prospects for coarse grain crops in the European Union, Mexico and Ukraine, thanks to hot and dry weather conditions.
• The production forecast for global coarse grains in 2024 has indeed been adjusted downward to 1 523 million tonnes.
• That is a reduction of 7 million tonnes compared to July, and now sitting 9.4 million tonnes (0.6 percent) below 2023’s level.
• FAO’s production forecast for the world wheat output stands at 791.4 million tonnes, up 2.3 million tonnes from the previous projection in July, and now nearly 3 million tonnes higher year on year.
• The forecast for world cereal utilization in 2024/25 was lowered by 4.7 million tons versus July to 2.852 billion tons, reflecting a 0.2% increase from 2023/24.
• Total utilization of coarse grains is forecast to rise by 0.2 percent to 1 526 million tonnes in 2024/25.
• The agency also cut its forecast for world cereal stocks at the close of seasons in 2025 by 4.5 million tons to 890 million.
• With the new forecasts, the global cereal stocks-to-use ratio in 2024/25 would remain nearly unchanged from last season at 30.7 percent, continuing to indicate adequate supply prospects in the new season.
• This month’s downward revision in world cereal stocks is attributed to a 10.6 million tonne cut in the global coarse grain stocks forecast.
• Despite these downward revisions, global coarse grain stocks are still forecast to rise above their opening levels by 1.2 percent.
• By contrast, global wheat inventories have been raised by 6.2 million tonnes and are now forecast to remain nearly on par with their opening levels at 314.4 million tonnes.
• FAO’s forecast for world trade in cereals in 2024/25 is pegged at 485.6 million tonnes, up 4.5 million tonnes from the July forecast but still pointing to a 3.3 percent contraction from the 2023/24 level.
• The forecast for world trade in coarse grains in 2024/25 (July/June) has been lifted by 2.0 million tonnes since the previous report in July.
• Despite the upward revision, global trade in coarse grains is still forecast to decline in 2024/25 to 232.9 million tonnes, representing a 4.2 percent contraction from 2023/24.
• The forecast for world wheat trade in 2024/25 (July/June) has also been raised, by 1.2 million tonnes, to 199.4 million tonnes.
• However, global wheat trade is still set to fall in 2024/25, by 3.7 percent.

Outside markets ...

Energy markets

Oil prices held at a 14-month low.

• Brent futures were down 1 cent to settle at $72.69 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 5 cents, or 0.1%, to settle at $69.15.
• That was the lowest close for Brent since June 2023 for a second day in a row and the lowest close for WTI since December 2023 for a third day in a row.
• The U.S. Energy Information Administration said energy firms, with stockpiles at 418.3 million barrels, pulled 6.9 million barrels of crude out of storage during the week ended Aug. 30.
• Further support came after OPEC+ agreed to delay a planned oil output increase for October and November, and said it could further pause or reverse the hikes if needed.
• A slumping in U.S. dollar offered an additional support.
• Meantime, energy firms added a surprise 0.8 million barrels of gasoline to U.S. stockpiles last week, which dragged down U.S. gasoline prices to their lowest close since March 2021.
• Thus, worries about demand in the U.S. and China and a likely rise in supplies out of Libya offset a big withdrawal from U.S. inventories and a delay to output increases by OPEC+ producers.

This morning, oil prices ticked up.

• Brent crude futures rose 13 cents to $72.82 by 0507 GMT, and U.S. West Texas Intermediate crude futures were up 12 cents, or 0.17%, to $69.27.
• For the week, Brent was on track to drop nearly 8%, while WTI was headed for a decline of almost 6%.
• Investors were awaiting for key U.S. employment data, after having got mixed signals on the U.S. economy during the week.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London edged up, supported by stronger rates for capesize vessels.

• The overall index added 0.9%.
• The capesize index rose 1.9%.
• The panamax index slipped 0.46%, and hovered around its lowest in more than a year.
• The supramax index was down 0.39%.

Equity markets

Us stock indexes settled mixed, mostly lower.

• The Dow Jones Industrial Average lost 0.5%, the S&P 500 slipped 0.3% for a third straight drop, while the Nasdaq composite held up, adding 0.3%.
• The US Aug ADP employment change rose +99,000, the smallest increase in 3-1/2 years.
• US weekly initial unemployment claims fell -5,000 to 227,000.
• US Q2 nonfarm productivity was revised upward to +2.5% from +2.3%.
• Q2 unit labor costs were revised lower to +0.4% from +0.9%.
• The US Aug ISM services index unexpectedly rose +0.1 to 51.5.
• Signs of weakness in the US labor market have fueled growth concerns.
• However, stocks found some support from a fall in the 10-year T-note yield to a 1-month low of 3.725%, falling -3.0 bp.
• Also, an upward revision to US Q2 nonfarm productivity and a downward revision to Q2 unit labor costs supported stocks.
• In Europe, the Euro Stoxx 50 fell to a 2-1/2 week low and closed down -0.68%.
• Eurozone July retail sales rose +0.1% m/m.
• German July factory orders unexpectedly rose +2.9% m/m.
• In China, the Shanghai Composite Index recovered from a 6-3/4 month low and closed up +0.14%.
• Japan's Nikkei Stock 225 fell to a 3-week low and closed down by -1.05%.
• Japan Jul labor cash earnings rose +3.6% y/y.

This morning, Asian shares mostly declined.

• Japan’s benchmark Nikkei 225 fell 0.7%, Australia’s S&P/ASX 200 rose 0.4%, South Korea’s Kospi slipped 1.2%, the Shanghai Composite shed 0.7%.
• Hong Kong was halted because of a typhoon.
• Trading was cautious amid lingering worries about a possible recession in the U.S..

Currency trading

The dollar index fell to a 1-week low.

• Japanese wage news pushed the yen to a 1-month high against the dollar.
• The yen rallied for a third session, after Japanese Jul labor cash earnings rose more than expected.
• Also, hawkish comments from BOJ Board member Takata were bullish for the yen.
• The dollar fell to its low after the US Aug ADP employment change showed employers added the fewest jobs in 3-1/2 years.
• However, the dollar recovered from its worst levels after the US Aug ISM services index unexpectedly rose.
• On the other hand, the EUR/USD climbed to a 1-week high.
• Signs of strength in the German economy have been positive for the euro.
• German Jul factory orders unexpectedly rose.
• Gains were limited, though after Eurozone Jul retail sales rose less than expected.

This morning, the U.S. dollar edged down to 142.36 Japanese yen from 143.40 yen. The euro cost $1.1120, up from $1.1112.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Dec contract was down 6c/bu to 574.6c/bu;
• Kansas wheat Dec contract was down 4.2c/bu to 588.6c/bu;
• Minneapolis wheat Dec contract was up 2.2c/bu to 625.6c/bu;

• MATIF wheat Dec was down €2/t to €218.5/t;
• ASX wheat Jan '25 contract was down A$1 to A$324/t;

• US DWI Cash (durum wheat index) was up 9.32c/bu to 628.67c/bu;

• 1CWAD (Canadian durum) avg spot price was up C$1.35/t to C$294.21/t.
• EDW (EU durum) Dec contract was unchanged to €314.5/t;

• Chicago corn Dec contract was down 2c/bu to 410.6c/bu;
• MATIF corn Nov was down €1/t to €202.75/t;

• Chicago soybeans Nov was up 2c/bu to 1,023.4c/bu;

• Winnipeg canola Nov contract, was up C$8.2/t C$587.9/t;

• MATIF rapeseed Nov was up €7/t to €473.5/t;

• Brent crude Nov was down US$0.01/barrel to $72.69;

• WTI crude Oct was down US$0.05/barrel to $69.15;

• BADI (Baltic Dry Index) was up 17 points to 1.919;

• Dow Jones was down 219,22 points to 40.755,75;
• S&P 500 was down 16,66 points to 5.503,41;
• NASDAQ Composite was up 43,46 points to 17.127,66;

• US dollar index (Dec '24) was down 0.227 points to 100.719;

• AUD/USD firmer at US$0.6741;
• USD/CAD weaker at $1.3503;
• EUR/USD firmer at $1.1110;
• USD/RUB firmer at ?88.2606.

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 ...

Note:

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