GRAIN & PRICES WEEKLY REPORT
For the third week of January, US farm markets featured some explosive prices.
Friday’s corn market, indeed, ended with futures 2 to 5 1/4 cents in the black.
Thus the March contract completed the week with a 3.35% gain.
After rallying sharply both on Wednesday and Thursday, soybeans eased back 10 3/4 to 11 1/2 cents on the week’s final trading day, however the March contract, has only capped its weekly gains, closing by 3.25% higher week on week.
Soymeal futures were $6.40 to $8.10 in the red on Friday, that completed the week with a $12.90 loss in the March contract or down 3.18% for the week.
Soybean oil futures rallied to new highs this week, having gained 7.7% from Friday to Friday.
Chicago wheat futures were the weakest in the domestic markets’ pullback into the weekend.
Indeed, at the close, SRW futures were 0.6% to 1.3% in the red and March was down by double digits.
However, March SRW was still 5.2% higher from Friday to Friday.
HRW futures closed 0.3% to 0.44% weaker on Friday, which for March left the week’s move at a 6.5% gain.
March MPLS wheat gained 6.6% from Friday to Friday, despite the front months dropping 4 3/4 to 9 cents on the week’s final trade day.
Particularly, CBOT corn futures were up 20 cents to $6.16/bu.
CBOT soybean futures were up $0.445 at $14.14/bu.
Soymeal slumped by $12,9/smt at $392.70 smt.
Soy oil soared $4.54 cents at $63.00.
CBOT soft red winter (SRW) futures rose 38.5 cents to close at $7.80/bu.
KCBT hard red winter (HRW) futures gained 48.30 cents to end at $7.93/bu.
MGE hard red spring (HRS) futures jumped 57.70 cents to close at $9.36/bu.
Meantime, as of January 20, 2022, US corn 3YC (Gulf) was at $286/mt (up $9/mt from last week).
US soybean 2Y (Gulf) quoted at $573/mt (up $19/mt from last week).
US wheat No 2 Hard Red Winter (HRW) was valued at $375/mt (up $13/mt from last week).
US wheat No 2 Soft Red Winter (SRW) was at $340/mt (up $14/mt from last week).
Northern Durum offers from the Great Lakes for April/May 2022 delivery are quoted at $660.00/MT ($18.00/bu) (unchanged from prior week).
Meantime, USDA reported the week’s average cash corn oil price ranged from 62.5 cents to 64.38 cents regionally.
That was between a 70 point and a 158 point increase from last week’s market, as average prices last week ranged 61.75 to 63.69 cents regionally.
Spot DDGS FOB rates were firm to $4/ton lower with NOLA ranging $241-252/ton and PNW at $287.
USDA had saw the past week’s average NOLA FOB at $248.50/ton and the PNW at $287/ton.
The weekly average ethanol cash prices came were substantially unchanged.
Indeed, average prices ranged for the week ended 1/21 between $1.95 NB to $2.11 WC &EC compared to prior week when ranged from $2.11 to $1.94/gal.
Meanwhile gasoline futures ended the week at $2.4451, that was up from $2.4019/gal posted last week.
The weekly spot price for B100 fuel was unchanged at $5.18/gal during the week of 1/21.
USDA’s weekly Crush report showed the estimated processing value of soybeans was $17.24/bu on $13.63 cash beans.
That compared to $17.75/bu reported prior week on $13.91 beans.
In energy market, oil prices slid for a second day in a row on Friday, pressured by an unexpected rise in U.S. crude and fuel inventories while investors took profits after the benchmarks touched seven-year highs earlier in the week.
However, both crude benchmarks rose for a fifth week in a row, gaining around 2% this week.
Prices were up more than 10% so far this year on concerns over tightening supplies.
In fact, Brent futures fell 49 cents, or 0.6% on Friday, to settle at $87.89 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 41 cents, or 0.5%, to settle at $85.14.
Earlier in the week, both Brent and WTI rose to their highest levels since October 2014.
In the freight market, the Baltic Exchange’s dry bulk sea freight index fell for the eleventh straight session on Friday, en route to its second consecutive weekly decline, tracking weaker rates across all vessel segments.
Indeed, the overall index, which factors in rates for capesize, panamax and supramax vessels, fell 59 points, or 4%, to 1,415, its lowest since mid-February 2021.
The index has lost nearly 19.8% this week.
The capesize index dropped 140 points, or 13.6%, to 891, its lowest since June 2020. The index is down 40.4% this week, its biggest drop since the week ended Dec. 17.
Average daily earnings for capesizes, which transport 150,000-tonne cargoes such as iron ore and coal, dropped by $1,157 to $7,390.
The panamax index slipped 14 points, or 0.7%, to 2,010, its lowest since mid-April 2021.
The index was down 15.3% for the week.
Average daily earnings for panamaxes, which ferry 60,000-70,000 tonne coal or grain cargoes, fell by $133 to $18,087.
The supramax index fell 24 points to its lowest level since end-February 2021 at 1,749.
In equities markets, risk aversion dominated markets on Friday as stocks slumped both on Wall Street and in Europe.
In Europe, the German, French and Italian indices fell almost 2%, with the broad Euro STOXX index of 600 leading regional companies closing down 1.84%.
MSCI's all-country world index fell 1.74%.
On Wall Street, the Dow Jones Industrial Average fell 450.02 points, or 1.3%, to 34,265.37, the S&P 500 lost 84.79 points, or 1.89%, to 4,397.94 and the Nasdaq Composite dropped 385.10 points, or 2.72%, to 13,768.92.
For the week, the S&P 500 fell 5.7%, the Dow dropped 4.6% and the Nasdaq declined 7.6%.
The Dow fell for a sixth straight session, its longest streak of daily declines since February 2020.
The S&P 500 closed below its 200-day moving average, a key technical level, for the first time since June 2020.
Both the S&P 500 and the Nasdaq posted their biggest weekly declines since the market crashed in March 2020.
The Nasdaq has now fallen 14.3% from its November peak and on Friday closed at its lowest level since June.
The benchmark S&P 500 posted its third straight week of declines, ending 8.3% down from its early January record high.
The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.138% to 95.636 on friday, but increased from last week's 95.161, gaining for the week, around 0.5%.
In Canada, as of January 17, 2022, Canadian wheat prices for FOB delivery West Coast were (Cdn$/mt):
- for the N1 class CWRS 13.5% - $460.77 per tonne, down C$27.57/t from prior week;
- for the N2 class CWRS 13.0% - $450.19/t, down C$37.58 wow;
- for the N3 CWRS - $440.99/t, down C$20.79 from prior week.
As of January 17, 2022, for the N1 CWAD 13% (durum wheat first class) deferred average prices for delivery in March '22 were at C$737.69 down C$21.02 per tonne week on week.
Spot export basis West Coast & Central SK jumped from C$ 48.75 to 120.08 per tonne, as delivered FOB price Great Lakes was at C$ 827.72, up from C$ 795.57 per tonne posted prior week.
That was C$32.15 higher from the prior week.
Meanwhile, as of January 19, 2022, durum wheat (CWAD) FOB price delivered in St. Lawrence, was valued at C$857.64 per tonne, down C$1.23 from prior week.
As of January 21, 2022, for the N1 CWAD 13% (durum wheat first class), average street prices in REGIONAL ZONES were at C$706.54 per tonne, down C$40.28 from prior week.
In South America, as of January 20, 2022 - Argentina Wheat Grade 2 export price, (Up River) was at $301, up $1 from prior week.
Argentina corn feed was up $6/t for the week, closing at $276.
Brazilian corn feed (Paranagua) was at $290, up $13 from prior week.
Argentina feed barley, was down $8 on week, posting at $290.
Argentina soybean was up $9 at $608.
Brazilian soybean rose $14 finishing the week at $554.
In Europe, Euronext ended the week on mixed note, as wheat in particular continued its technical retreat after that critical tensions at the Ukrainian border had pushed up all grain prices during the week.
The American and Russian diplomats have certainly resumed their conversation, but the firmness of their positions does not for the moment suggest a way out of the crisis in the short term.
The threat of a disruption of trade flows in the Black Sea therefore remains on everyone's mind.
Thus, the wheat contract gained 9 euros for the week to close at 272.5 euros per tonne, soaring by 3.41%.
Corn prices rose 8.50 euros for the week, to close at 247.5 euros per tonne, lifting by 3,56% for the week.
In rapeseed, volatility continued also on this week.
Indeed, February futures after had seen a continues "bungee jumping", finally closed this week at 757€/t, settling more then 1.68% lower week on week.
March-22 UK feed wheat futures, gained £8.1 from prior week, closing at £216.95/t.
Meantime, as of January 20, 2022, FOB prices in US dollar for French wheat with 11.5% protein and February delivery, were at $ 319/mt, up $3/t from prior week.
French durum wheat, FOB Port la Nouvelle was not quoted this week.
French durum wheat - basis La Pallice, was at $527.50/mt, up $12.12 from prior week.
Spanish durum wheat Sevilla (DepSilo), was at $612.58/mt, down $11.61 from prior week.
Italian durum wheat Bologna (Delivered to first customer), was valued this week at $615.41 per tonne up $3.19 from past week.
German wheat (Depsilo) with 12.5 pro was at $325.57/mt, down $4.28 from last week.
Baltic wheat (Delivery First) was at $304.02/mt, up $29.15.
Corn delivered Bordeaux Spot - July 2021 basis was at $282.47 per tonne, up $5.30 from prior week.
FOB Rhin Spot - July 2021 basis was at $292.68 per tonne, up $6.36 week on week.
Feed barley delivered Rouen - July 2021 basis was at 288.14$/t, up $9.83.
Malting barley FOB Creil Spot - July 2021 basis was at $422 per tonne, down $1.76/t from prior week.
Rapessed FOB Moselle Spot - Flat - 2021 harvest was at 804.29$/ton, down $47.81 compared to prior week.
Standard sunseed delivered St Nazaire Spot - Flat - 2021 harvest was up 10.37$ from prior week at $709 per tonne.
From North Africa, Algeria will raise the purchase price of wheat and barley from local farmers to encourage production and achieve food security, the presidency said in a statement past Sunday.
The price for durum will increase to 6,000 dinars ($43.08) per quintal (100 kg) from 4,500 dinars, and soft wheat will fetch 5,000 dinars per quintal instead of 3,500 dinars.
The state will buy barley from local farmers for 3,400 dinars per quintal, up from 2,500 dinars previously.
($1 = 139.2680 Algerian dinars).
From the Black Sea basin, Russian wheat prices fell past week.
Indeed, according to the IKAR, Russian wheat with 12.5% protein content loading from Black Sea ports for supply in January stood at $328 a tonne free on board (FOB), down $2 from thin trade in early January.
SovEcon, another consultancy, pegged wheat at down $1 at $332 per tonne.
Barley export price was down $2 at $295 a tonne.
Domestic 3rd class wheat, European part of Russia, excludes delivery was valued at 15,075 roubles/t ($198.81) +200 rbls from prior week (Sovecon);
Sunflower seeds were at 35,375 rbls/t +475 rbls (Sovecon);
Domestic sunflower oil was valued at 86,000 rbls/t +650 rbls (Sovecon);
Export price for sunflower oil was at $1,350/t +$35 (Sovecon);
Export price for sunflower oil was at $1,345/t +$35 (IKAR);
Soybeans were at 43,700 rbls/t +400 rbls (Sovecon);
White sugar, in Russia's south was valued at $669.2/t +$10.65 (IKAR);
($1 = 76.6814 roubles).
Meantime, the Russian agriculture ministry on Friday has amended the export tax for wheat, barley and corn for the week of January 26, 2022 to February 01, 2022.
Particularly, the tax will be $95.8 on wheat, $74.4 on barley and $50.6 on corn.
Indicative price will be $336.9 for wheat, $291.3 for barley and $257.4 for corn.
That is compared, with prior week (Jan 19-25) when the tax was $97.5 for wheat, $79.0 for barley and $46.1 for corn, while indicative price were $339.3 for wheat, $297.9 for barley and $250.9 for corn.
In Ukraine, as of January 19, 2022, wheat prices were at $316/t, up $1 from prior week.
Corn price was at $280 per tonne, up $3/t week on week.
Barley was valued at 295 $/t, up $2 from last week.
From the Middle Kingdom, China sold 501,283 tonnes of wheat, or 100% of the total offer put up for auction on Jan. 12, has said a statement from the National Food and Strategic Reserves Administration.
The grain, targeted only at milling plants, was sold at an average price of 2,713 yuan ($427.43) per tonne.
The sale followed an auction from the reserves a week earlier where 506,568 tonnes of wheat, also 100% of the total offer, were bought out by millers.
($1 = 6.3472 Chinese yuan renminbi).
From Australia, prices for feedgrain have eased in the northern market this week as growers quit barley and SFW wheat to make room for a bumper sorghum harvest knocking on the door.
In the south, growers have limited interest in selling at current values, and most activity is occurring within the trade.
This includes some up-country consumers swapping out pre-booked ASW wheat for cheaper SFW, with sound grades still making their way into lively export channels.
Particularly, indicative delivered prices in Australian dollars per tonne were:
Barley Downs: (Nearby) $290, steady from Jan 13;
SFW wheat Downs: (Nearby) $305, down $3 from Jan 13;
Sorghum Downs: (Nearby) $305, down $20 from Jan 13;
Barley Melbourne: (Nearby) $315, up $5 from Jan 13;
ASW wheat Melbourne: (Nearby) $385 up $5 from Jan 13.
SFW wheat Melbourne: (Nearby) $345up $5 from Jan 13.
On the international trade scenario, the Taiwan Flour Millers' Association purchased an estimated 49,395 tonnes of milling wheat to be sourced from the United States in a tender which closed last Thursday.
The wheat was bought in one consignment comprising various wheat types for shipment from the U.S. Pacific Northwest coast between March 16 and March 30.
The purchase involved 30,150 tonnes of U.S. dark northern spring wheat of 14.5% protein content bought at $414.16 a tonne FOB U.S. Pacific Northwest coast.
Another 14,600 tonnes of hard red winter wheat of 12.5% protein was bought at $401.60 a tonne FOB and 4,645 tonnes of soft white wheat of 11% protein was bought at $430.91 a tonne FOB.
The consignment has an additional freight charge of $46.50 per tonne for ocean shipping from the U.S. Pacific Northwest coast to Taiwan.
Seller of the dark northern spring and soft white wheat was believed to be trading house ADM, while the hard red winter was said to have been sold by CHS.
In its prior reported tender on Dec. 23, the association had bought an estimated 110,000 tonnes of milling wheat to be sourced from the United States.
Algerian state agency OAIC is believed to have purchased some 205,000 tonnes of animal feed barley to be sourced from optional origins in a tender which closed last Tuesday.
Traders initially estimated the purchase at around 120,000 tonnes.
The barley was all said to have been bought at $324 a tonne c&f.
It was thought to have been purchased from four sellers, one providing 60,000 tonnes, one 60,000 tonnes, one 55,000 tonnes and one 30,000 tonnes.
The tender had sought a nominal 50,000 tonnes for shipment in two periods: Feb. 16-28 and March 1-15.
Algeria does not release results of its tenders and reports are based on trade estimates.
Turkey's state grain board TMO has started making provisional purchases of wheat in an international tender which closed last Tuesday with about 175,000 tonnes initially bought.
The tender was for 335,000 tonnes.
Red milling wheat of 12.5% and 13.5% protein content is sought in a series of consignments to several Turkish ports.
Traders reported these provisional purchases:
Port Iskenderun 25,000 t with 12.5% protein, offered by Altin Ates $345.70 ex warehouse;
Port Iskenderun 25,000t with 12.5% protein, offered by Viterra at $345.80 ex warehouse;
Port Mersin 50,000t with 12.5% protein, offered byTiryaki $351.40 ex warehouse;
Port Izmir 25,000 t with 12.5%, offered by Yayla at $350.15 ex warehouse;
Port Izmir 25,000t with 12.5%, offered by Sierentz at $345.15;
Port Derince 25,000t with 12.5% protein, offered by Erser at $344.30;
In its prior reported wheat tender on Dec. 21, the TMO had bought about 320,000 tonnes at the lowest price of $354.90 a tonne c&f.
The lowest price offered in the first round of Thursday’s tender from Turkey’s TMO state grain board to buy 345,000 tonnes of animal feed barley was believed to be $324.65 a tonne c&f.
The lowest offer was said to have been submitted by trading house AP Grain for a consignment of at least 25,000 tonnes for shipment to the port of Bandirma.
Shipment is sought between Feb. 15 and March 10 to a series of Turkish ports.
Other offers included barley for shipment to Derince at $334.92 a tonne c&f, to Iskenderun at $332.42 a tonne c&f, to Mersin at $332.42 a tonne c&f, to Izmir at $338.70 a tonne c&f, to Tekirdag at $330.80 a tonne c&f, to Samsun at $333.65 a tonne c&f and to Trabzon at $338.00 a tonne c&f.
Watching the next week market, we go back to a regular schedule this week, in so far as that is possible with all the Omicron disruptions.
Cattle traders will begin the week reacting to Friday night’s COF report results.
Grain traders are reacting to any surprise positions inherited from February options expirations.
USDA Export Inspections will be out on Monday.
The monthly Cold Storage report is also planned for a Monday afternoon release.
Weekly EIA data will be released on Wednesday morning.
The weekly Export Sales report is expected on Thursday.
Author: Sandro F. Puglisi
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