Good morning Farmer Family …
A broad range of stocks and commodities trended higher on Friday.
Grain prices joined to the party, raking in double-digit gains.
Thus, US farm markets saw corn to go home with 2.47% gains.
Soybeans firmed 1.89% higher.
Soymeal ended with 1.39% gains.
Bean oil prices were also firm, closing 2.52% higher.
Wheat contracts made most inroads, as Chicago SRW prices climbed 4.89%, Kansas City HRW rose 4.06%, and Minneapolis spring wheat prices gained 3.26%.
For the week, corn prices ended a net 2.9% higher.
Soybean prices, inspite the Friday rally, were unable to fully erase earlier weakness, as were down by 0.58% for the week.
Meal was down the most for the complex, closing 2.17% weaker wk/wk.
Bean oil lost 1.85% for the week.
Wheat markets skyroketed.
Friday’s rally in Dec SRW, put the contract a net 7.21% higher on the week.
KC wheat prices were a net 5.87% stronger Friday to Friday, and MPLS gained 4.2% through the week.
Going inside the numbers, during the week, corn prices closed up $0.193 at $6.85/bu.
Soybean prices finished the week $0.082 weaker at 14.12/bu.
Soymeal fell $9.2/smt, closing at $414.8 smt.
Soy oil, shedded $1.26, to close at $66.68.
CBOT soft red winter (SRW) prices jumped $0.585 to close at $8.70/bu.
KCBT hard red winter (HRW) prices soared $0.515, ending at $9.29/bu.
MGE hard red spring (HRS) prices rose $0.375 to close at $9.28/bu.
Corn basis bids were mixed at two Midwestern processors (moving 15 cents in either direction) while holding steady elsewhere across the central U.S. on Friday.
Soybean basis bids were steady across most Midwestern locations, but did firm 3 cents at an Ohio elevator and climb 20 cents higher at an Illinois river terminal.
As for wheat, this week, basis was mixed in the Gulf and Pacific Northwest (PNW).
In the Gulf, HRS basis was down while SRW and HRW basis were both up.
In the PNW, HRW basis was up while HRS basis was flat.
Prices for soft white wheat were up.
Grain traders said wheat exports remain slow due to price factors.
In this context, as of September 08, 2022, FOB prices saw US wheat No 2 Hard Red Winter (HRW) valued at $392/mt (up $10/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was valued at $351/mt (up $15/mt from last week).
Northern Durum offers from the Great Lakes for October 2022 delivery was valued at $11.15/bu, unchanged week on week ($410.00/MT).
As for corn, US corn 3YC (Gulf) was at $320/mt (up $2/mt from last week).
As for soybean, US soybean 2Y (Gulf) quoted at $592/mt (down $26/mt from last week).
The weekly Ag Energy Roundup report from USDA had the week’s cash ethanol markets range $2.27 to $2.59/gal regionally.
Prices were generally 11c/gal weaker ,wk/wk.
USDA reported cash B100 prices were $6.90/gal in IL and $6.83 in MN through the week, unchanged from past week.
In energy markets, oil prices rose about 4% on Friday.
Brent crude, indeed, rose $3.69, or 4.1%, to settle at $92.84 a barrel.
U.S. West Texas Intermediate (WTI) crude rose $3.25, or 3.9% to settle at $86.79 a barrel.
However, despite Friday’s bounce, both crude benchmarks reported a weekly drop, with Brent down about 0.2% on the week, while WTI posted a weekly decline of 0.1%.
In ocean freight markets, the Baltic Exchange’s main sea freight index rose on Friday and recorded its best week in about four months as panamax rates marked their biggest weekly gain in more than eight years.
The overall index, indeed, was up 35 points, or about 3%, at 1,213.
The index recorded a weekly gain of about 11.7%, its highest since mid-May.
Particularly, the capesize index snapped its three-day falling streak, gaining 20 points, or about 3%, to 672.
It posted a weekly loss of 8.3% and has declined for seven out of the last eight weeks.
Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as coal and steel-making ingredient iron-ore used in construction, rose $167 to $5,574.
The panamax index was up for the seventh consecutive session, gaining 108 points, or about 6.2%, to 1,865, an over three-week high.
It posted a 46.7% weekly gain, its best since early July, 2014.
Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, were up $971 at $16,786.
The supramax index, which has not seen a single session of gains in over two weeks, lost 2 points to 1,475.
In equity markets, Wall Street added to its weekly gains Friday with a broad rally that broke the market’s three-week losing streak.
The S&P 500 closed 1.5% higher, its third straight increase, and ended with a 3.7% gain for the week.
Big gains for technology companies pushed the Nasdaq composite to a 2.1% gain, while the Dow Jones Industrial Average rose 1.2%.
Both indexes also notched their first weekly gain in four weeks as the Dow advanced 2.7% for the week, and the Nasdaq gained 4.1%.
Particularly, the S&P 500 rose 61.18 points to 4,067.36.
The Dow added 377.19 points to 32,151.71, while the Nasdaq rose 250.18 points to 12,112.31.
Smaller company stocks also notched solid gains.
The Russell 2000 index rosed 35.94 points on Friday, or 1.9%, to 1,882.85.
In currency trading, the dollar index on Friday fell -by 0.67% to a 1-1/2 week low and posted moderate losses.
The EUR/USD rose by +0.49% on Friday, climbing to a 3-week high.
The USD/JPY fell by -0.99% rebounding moderately from Wednesday’s 24-year low against the dollar.
In Canada, as of September 6, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $470.45 per tonne, down C$9.56/t from prior week;
– for the N2 class CWRS 13.0% – $464.56/t, down C$9.56 wow;
– for the N3 CWRS – $483.83/t, up C$12.99 from prior week.
As of September 6, 2022, for the N1 CWAD 13% (durum wheat first class) average street price were at C$396.84, shedding by C$16.53 week on week.
The export basis West Coast & Central SK, moved moderately higher from C$ 133.09 to 136.24 a tonne.
Thus, delivered FOB price Great Lakes was posted at C$533.08.
That was down C$13.38 from prior week.
Per latest data from European Commission, as of September 7, 2022, Durum wheat – FOB CA St Lawrence (CWAD) was offerd at C$553.60/t, down C$37.25/t week on week .
As of September 9, 2022, for the N1 CWAD 13% (durum wheat first class), average street price in REGIONAL ZONES were at C$392.68 per tonne, down C$2.59 from prior week.
(1USD=Cnd$1.3026, down from 1.3130 a week earlier).
In South America, as of September 08, 2022 – Argentina Wheat Grade 2 export price, (Up River) was at $400, unchanged from prior week.
Argentina corn feed was up $7/t for the week, closing at $293.
Brazilian corn feed (Paranagua) was valued at $291, unchanged from prior week.
Argentina feed barley, was unchanged for the week to $320.
Argentina soybean was down $20 at $577.
Brazilian soybean lost $3 finishing the week at $607.
In Europe, December wheat prices closed the week at 337.75 euros a tonne, up €17.75/t for the week.
November corn price, was €11.75/t firmer for the week, closing at 328.00 euros per ton.
Rapeseed Nov contract closed at €597.75/t, down €15/t for the week.
Nov-22 UK wheat feed contract, closed at £274/t, up £8/t week on week.
Meantime, as of September 08, 2022, FOB prices in US dollar for French wheat with 11.5% protein and Oct delivery, were at $334/mt, up $1 from prior week.
German wheat, Deposilo Hamburg, was valued at $336.51/t, up $2.02 from prior week.
Baltic wheat, delivery first Vilnius, was quoted $308.38, up $1.77 from prior week.
Spanish durum wheat Sevilla (Depo Silo), was valued past week at $502.25 per tonne, up $4.5 from prior week.
French durum wheat – delivered La Pallice Spot – July 2022 basis, this week was valued at $431.94/mt, down $3.87 from prior week.
Italian durum wheat Bologna (Delivered to first customer), was valued $490.2/t, up $7.88 from prior week.
Corn, delivered Bordeaux Spot – July 2022 basis, was at $336.5 per tonne, up $5/t from past week.
Corn FOB Rhin Spot – July 2022 basis, was up $3.9 to $323.45/t.
Feed barley delivered Rouen was at 294.32$/t, up $6.62 per tonne.
Malting barley FOB Creil Spot – July 2022 basis was at $356.60 per tonne, up $8.17/t from prior week.
Rapessed FOB Moselle – 2022 harvest was at 602.70$/ton, up $0.42 compared to prior week.
Standard sunseed FOB Bordeaux – 2022 harvest was down 13.43$ from prior week at $723.24 per tonne
(Eur/USD = 1.0045 vs last week 0.9955).
In Russia, the export duty on wheat from the Russian Federation will decrease once again by 12.05%, according the Ministry of Agriculture.
Particularly, the export duty on wheat will decrease to 2,962.9 from 3,368.9 rubles per ton a week earlier.
The duty on barley, meantime will increase to 2,717.7 rubles from 2,699.2 rubles per ton a week earlier.
Also for corn it will up to 3,784.4 rubles from 3,663.7 rubles a week earlier.
This new duty rates will be in effect through September 20, inclusive.
The duties were calculated based on indicative prices: $316.8 per ton for wheat ($329.3 a week earlier), $292.5 for barley ($294.7), $317.6 for corn ($317.6).
In Australia, indicative delivered prices in Australian dollars per tonne for old crops past week were:
Barley Downs: $370, down $2 from Sep 1;
SFW wheat Downs: $385, down $5 from Sep 1;
Sorghum Downs: $355, unchanged from Sep 1;
Barley Melbourne: $363, down $2 from Sep 1;
ASW wheat Melbourne: $405, unchanged from Sep 1.
SFW wheat Melbourne: $380, down $15 from Sep 1.
Growers continued offering new crops.
Particularly, past week prompts were:
Barley Downs: $355, down $5 from Sep 1;
SFW wheat Downs: $370, down $5 from Sep 1;
Sorghum Downs: $350, up $10 from Sep 1;
Barley Melbourne: $360, down $5 from Sep 1;
ASW wheat Melbourne: $415 up $15 from Sep 1;
SFW wheat Melbourne: N.Q., as at Sep 1 was at $370.
(AUD/USD=> US$0.6838 vs. US$0.6813 prior week).
Main News of the Week
From the USA, USDA’s Export Reporting System (ERS) remained down this week.
The Foreign Agricultural Service, which publishes the weekly report, plans to resume publication on September 15.
USDA announced that it will release four weeks’ worth of export sales data next Thursday.
The agency says the weeks of August 18 and August 25 will be combined into a single reports, and additional separate reports will be issued for the reporting periods ending September 1 and September.
Monthly Census data showed July corn exports at 4.58 MMT (180.4 mbu).
That was a 16.57% drop from June and down 16.26% from July 2021.
As for soybean, Census data indicated that 2.32 MMT (85.36 mbu) of soybeans were shipped in July.
That was more than double 2021 and 2.29% larger than the previous month.
As for wheat, Census trade data showed 1.52 MMT (55.7 mbu) of wheat was exported in July.
That was a 4.8% drop from June and the lowest July number since 1971 (down 26.1% from the same month in 2021).
Ethanol shipments were more than double last year and a 5.7% increase over June.
Weekly Ethanol data from EIA showed production dropping 19,000 barrels per day in the week of 9/2 to 989,000 bpd.
Stocks dropped again in that week, down 395,000 barrels to 23.138 million barrels.
Friday’s CFTC Commitment of Traders report showed light new buying and light short covering from the spec funds in corn through the week of 9/6.
That left the managed money net position 5,012 contracts more net long in corn to 226,479 contracts.
Commercial corn hedgers lifted long hedges for a 6,552 contract stronger net short of 456,538 contracts as of 9/6.
As for soybean, managed money soybean traders were closing more longs than shorts through the week of 9/6.
The 7,242 contract lighter OI left the specs 2,172 contracts less net long to 99,629 contracts.
Commercial bean traders lightened their net short by 5.7k contracts to 133.6k via net new buying and closing short hedges.
In soymeal managed money firms were rotating existing longs to new shorts for a net 12,005 contract swing.
They were still 81,621 contracts net long as of 9/6.
The funds were also closing longs and adding new shorts in BO, for a 5.2k contract lighter net long of 44k contracts.
As for wheat, CFTC data had SRW spec traders at 21,431 contracts net short as of the 9/6 settle.
That was a 816 contract weaker net short through the week on reduced OI.
For KC wheat, the specs were 11,087 contracts net long after long liquidation.
Managed money firms were reducing their net short in spring wheat through the week, taking it to 1,038 contracts as of the 9/6 close.
From Canada, Statistics Canada reported that total Canadian wheat stocks declined to 3.7 MMT, down 38% compared to a year ago.
Canadian durum stocks also fell sharply to 565,000 MT, a 31% drop year-over-year.
Saskatchewan reported spring wheat harvest was 42% finished as of 9/8, compared to the 40% average pace.
Winter cereals are very close to being completed with 96 per cent of winter wheat and 84 per cent of fall rye harvested.
Ninety-one per cent of lentils and field peas, 70 per cent of durum, 52 per cent of barley, 40 per cent of spring wheat and 22 per cent of the canola crop has now been combined.
The current estimated averages of crop yields are 43 bushels per acre for hard red spring wheat, 30 bushels per acre for durum, 34 bushels per acre for canola, 34 bushels per acre for field peas and 1,174 pounds per acre for lentils.
From South America, Brazil’s CONAB trimmed their 21/22 corn crop by 1.2 MMT to 113.3 MMT in their Sep report.
CONAB sees Brazilian soybean output as 125.55 MMT for 21/22, which was up slightly from their August figure.
Argentine farmers sold a total of 2.13 million tonnes of soybeans on Monday and Tuesday, surpassing in just two days the 667,000 tonnes sold last week after the government established a preferential exchange rate for soybean exports, the Rosario Stock Exchange said Wednesday.
The exchange said a million tonnes of beans had traded on Wednesday, taking the total to over 3 million tonnes since the policy went to effect.
Frosts recorded in the last two weeks in Argentina have caused some damage to the South American country’s 2022/23 wheat crop, the Buenos Aires grains exchange said on Thursday.
In Europe, the ECB expects prices to rise by +8.1% this year and +5.5% in 2023 and +2.3% in 2024.
Consequentially, the 10-year German bund yield climbed to a 2-1/2 month high of 1.730% after the ECB raised its main refinancing rate by +75 bp to 1.25% and said it “expects to raise rates further.”
AGPB, a French wheat growing group, said that fertilizer shortages could affect farmers’ ability to grow wheat next year.
AGPB warned that reduced Russian gas exports to the E.U. could negatively affect farmers’ ability to access fertilizer supplies.
The farm group also said production costs were €100.00 higher than last year when compared to the current metric ton cost French wheat.
France reported corn harvest reached 5% complete as of 9/5.
From the Black Sea basin, Russian President Vladimir Putin complained this week that Ukraine is obfuscating its responsibility to export wheat to countries with significant food deficits and is delivering grain to the European Union (E.U).
Turkey, called it a “brazen deception.”
Uncertainty over the Ukrainian grain export deal underpinned markets.
Leaders of Russia and Turkey plan to meet next week to discuss the deal.
The White House, however, has since said they do not believe the deal is in danger of losing Russian support.
Russian foreign minister Sergei Lavrov called for the removal of “logistic sanctions that prevent the free access of Russian grain and fertilizers to world markets.”
IKAR raised their forecast for Russia’s crop 2 MMT to 97 MMT.
Ukraine’s Ag Ministry reported harvest reached 99% complete, with 19.5 MMT counted.
That is down from 33 MMT last year.
From the Middle Kingdom, China’s soybean imports fell 24.5% in August from a year earlier, customs data showed on Wednesday.
Industrial animal feed production fell almost 7% in July versus a year ago, according to the China Feed Industry Association.
From January to August, China brought in 61.33 million tonnes of the oilseed, down 8.6% from the same period a year ago, the customs data showed.
On this wake, USDA’s Ag Attache reduced their forecast for Chinese soybean imports, with 21/22 needs lowered to 92 MMT and 22/23 reduced to 96.5 MMT.
From Sout East Asia, devastating floods in Pakistan have destroyed as much as 65% of the country’s domestic food crops and damaged agricultural land.
Making matters worse, the planting season, including for wheat, is quickly approaching, and the wet ground may be impossible to plant reported Al Jazeera.
Pakistan’s wheat imports have grown exponentially over the last decade despite domestic production.
The USDA projects that wheat imports will be 118% more than the 5-year average in 2022/23.
Traders are monitoring the food inflation implications after a partial rice export ban by India.
The country banned exports of broken rice and imposed a 20% duty on exports of various grades of rice on Thursday.
Some rice loadings have stopped at Indian ports and nearly one million tonnes of grain are trapped there, as buyers refuse to pay the government’s new export levy on top of the agreed contract price, five exporters reported on Friday.
Watching next week’s market, the week starts out normal with the weekly Export Inspections report released in the afternoon.
Then, will out the Crop Production, Cotton Ginnings, and WASDE reports from USDA.
We will also see the release of the NASS Crop Progress report. On
Wednesday the weekly EIA report will release ethanol stocks and production data with Sep contracts expiring at the close.
On Thursday, we will finally get a look at the last 4 weeks of Export Sales data.
That’s all, thank you.
We wish you a good day and a good weekend.
Author: Sandro F. Puglisi
