Global Grain Highlights – August 22nd – Web

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Oilseed Highlights

  • Oilseeds take a breather in this mornings trade:
    • Canola and soybeans trading higher yet for the week, but taking away some of the gains in this mornings session.
    • September soybean oil had a 5 day rally last week but took some heavy losses in recent trading sessions.
  • Statistics Canada is out with its latest estimates on the Canadian crop on Tuesday, August 29th
    • Canola estimates heading into the report range from low 16 mmt in private estimates to 18.6mmt from Ag Canada.  Average industry estimate sits around 17.4 mmt in pre report analysis.
    • Last year, Canada put out around a 18.2 mmt crop
  • Chinese oilseed markets have been strong, Dalian soybean, soybean meal and soybean oil all trading just off their 30 day highs. Rapeseed oil in China up 2.36% for the week.
  • Markets keeping a close eye on the US PRO FARMER crop tour that is taking place this week.
    • Day 1 yield estimates came in for South Dakota and Ohio. South Dakota soybean pods in a 3×3 section were up sharply from last year (Dry) but down 2.6% from the three year average.
    • Ohio pods were up 7.9% and reports of some beautiful soybean crops.
    • If one has been looking at the US drought monitor, Ohio has been less affected by the dryness all year and has had better than the rest in terms of crop conditions.  72% of the crop is listed as good or excellent. 59% of the crop nationally is rated as good to excellent, but Ohio brings that rating higher.
    • Tour will continue through Thursday and will get into the more drought struck regions of the country today and into tomorrow. Markets will be keeping a close eye on Illinois (65% G/E), Iowa (59% G/E) and Minnesota (53% G/E).  The top 3 soybean production states.
  • It is a general sentiment that the crop has grown in size overall vs shrunk in recent weeks due to some late season rains on the soybean production areas.
    • This weeks heat looks to have shifted west, out of the primary bean production regions of USA, Although the next 6-10 days looks as if there is limited precipitation in the forecast.  
    • Markets less reactive to these late season weather stories now, as we enter next week and roll into September, markets will come to the conclusion that the crop is mostly made and just need to see what the numbers roll in at.
  • Malaysian Palm Oil down 1.6% for the week.
    • Palm oil milled up 7% for the month
    • Malaysia will maintain an export duty of 8% for September
    • Exports up 17% month over month
  • USDA AUGUST WASDE:
    • Charts listed below
    • Old crop 2022/23 global soybean carryout growing to 103.1 vs 102.7 in July’s report
    • New crop 2023/24 global soybean ending stocks seen falling slightly by 1.6 mmt
    • Rapeseed ending stocks down 700,000 tonnes year over year, although not as tight as 21/22
    • USDA FAS left Canadian canola production estimates unchanged at 19mmt, the same month over month and the same as last year. USDA is one of the highest estimates of the crop so far, many private estimates atleast 1mmt less than the USDA is publishing.
  • Germany’s DBV August 22nd estimated that the German rapeseed crop would fall to 4.07mmt down 4.7% year over year. Germany is often EU largest rapeseed producer
  • European commission lowered its production estimate for oilseeds, mostly rapeseed, by 700,000 tonnes early August as the crop caught a late season drought. Germany, Czechia, Lithuania, Denmark and Romania suffered the greatest from the hot dry weather in its rapeseed production region
      • USDA HAS EU Harvest at 20.2 MMT while the EU has 19.5 mmt estimate
      • USDA also stating Canadian crop at 20.3 mmt while Agrifood Canada sits at 18.8 mmt.
  • Russia and Ukraine continue attacks on eachothers port infrastructure. Market not placing any war risk on these events as the grain appears to be moving without a trade deal. 
  • The two nations are at the tail end of harvest and currently need the ports more than ever.
    • In the past year, Ukraine relied upon Black Sea ports for about half of its exports, 25% through the Danube river system and another 25% through western borders into EU regions for further transit.
  • Next ABARES report is September 5th
            • Wheat at 26.2 mmt down 34% from last year and should come in below 10 year average
            • Barley at 9.9 million tonnes, down 30% from last year and 11% from the 10 year.
            • Canola to fall 41% to land at 4.9 mmt. Still 15% above the 10 year average.
  • Australia is a mixed bag, some eastern regions have been getting rains although many areas quite dry.
    • Aussie is still early into its growing season, moisture going to be watched closely going forwards.

EU RAPESEED S+D CHART (EU COMMISSION) – July 27, 2023

 

Australian Weather – Prior Week Rainfall 

USDA FAS OILSEEDS

OILSEED TECHNICAL INDICATORS

 CANOLA – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

September SOYBEAN OIL – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

November PALM OIL – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

Special Crops

    • Turkish and Indian lentil Prices sitting neat multi year lows.  
      • Small spike in recent weeks here as a sign of concern over the avaliability of Canadas crop heading into winter.
      • Australia still has a new crop to take off in a couple months but mixed reviews on that. We get an updated ABARES report here shortly that will take us through the mile high view of the crop.
      • Canada’s crop is coming off. Last years 2.3 mmt crop has an estimated average of 1.9 mmt this year. Lowest analyst estimate is a 1.6 mmt, we will get a full look at the crop size estimates on Tuesday
    • Durum crop for Canada estimated at 4.3 mmt in pre report analytics. 5.44 mmt was last years crop size.
    • Drought in Urals and Siberia regions of Russia could affect pea yield prospects in the growing region
    • US Pea crop early harvest looking to be better than expected
    • Durum is the hot topic of the trade. Saskatchewan’s Durum crop is in dire straights and rated at 16% good to excellent.
      • Much international attention as there is limited good durum crops in many regions across the world
    • Italian durum prices turning higher
    • Importer affordability is the topic of the day as many durum importers have signaled unwillingness to pay and need to use credit facilities to facilitate purchases
    • World of durum heating up with production issues in southern France, Canada and North Africa, Italy also faced some production issues in its most recent harvest due to quality and flooding.
    • Canada’s durum crop is concentrated in the drought region of the prairies and looks to be getting smaller each day as we inch towards the crops maturity.
    • EU feed and Malt Prices steady, despite late season drought and some production issues.
    • Canadian oat production could come in less than 2021 drought year due to the shrinking yield on far less acres than last year. The oat crop in northern regions is suffering from lack of sufficient rainfall.
    • Stats Canada pea acres down 10% year over year
    • EU malt barley crop to come in 18% lower than last year
    • Canadian Prairies. Dry areas persist but getting smaller or less severe with recent rains. Some pockets, eastern Alberta, very dry. Rainfall not abundant enough in areas to take the pressure off, more timely rains needed to help crop advance.
    • Australia continues to flood Chinese market with all pulses.
    • Poor Conditions in Northern African Durum production regions.

United States – Crop Production Regions

Grains

  • Wheat and Corn have been the victim of attack in recent weeks.
    • Corn is down a whopping $0.65 per bushel or 12.33% for the past month.
    • Chicago Wheat is down 14.6% for the past month, down 28% for the past 52 weeks.
    • Similar story in the spring wheat, down 13.2% in the past month or $1.17
  • Less supply fears have overtook the market and funds have become heavy sellers of cereal crops.
  • Pro Farmer crop tour just getting into the main corn production regions today. Had South Dakota and Ohio at 5.2% and 4.7% higher than the three year average on day 1 of the tour. The two states combined only account for 9% of total corn production in US.  Iowa, Illinois and Nebraska are the top 3 and account for just under half of total production.
  • The drop in corn prices has barley prices unable to hold onto their premium in the marketplace.  Corn can be shipped in cheaper into many feed destinations to replace barley at current prices.
  • Germany and France are struggling to get the last of their remaining wheat crop off fields and into market. Quality has been downgraded and much of the remaining crop will be feed.  They have a big week of harvest remaining but need to get a dry spell to finish up.  Germany is expected to put out a 20 mmt wheat crop, down from last years 22 mmt.
  • USDA August WASDE:
    • Bigger than expected old crop corn stocks, less than expected new crop
    • Wheat less than expected of crop, nearly the same as expected for new crop.
  • Ukraine crop getting bigger according to the USDA
    • 27.5 mmt vs 25 mmt on the corn crop for total production month over month.
    • 21 vs 17.5 mmt total on the wheat crop month over month 
  • GASC (Egypt) tendered for one cargo ship only (August 22nd) and took it for $270 with freight or $256 FOB
  • This week, Bangladesh tendered for milling wheat at $304 to $322 delivered, need to pull freight to achieve FOB levels
  • Big GASC (Egypt) wheat tender had FOB tenders come in at $270+ First week of August. Just a few weeks prior, offers were in the $240 range in early July. Some tenders were passed upon at $240 a few weeks ago. Tenders were all bid on by both Russian and Ukrainian exporters.
  • Australia / China set to resume unrestricted Barley trade here as a 80.5% tariff was announced it was being dropped early August
  • China and Australia used to hold a major Barley trade prior to restrictions imposed in 2021.
  • Canada could loose some market share into China as it filled some of the missing gap from the Australian barley trade.
  • JRC MARS July 24th:
    • Wheat yields down 2% month over month
    • Spring Barley down 3% month over month
    • Winter Barley Unchanged
  • Australian Barley crop estimated at 11mmt, down from last years massive 14.1 mmt. China expected to step into the market for this crop
  • India banned the export of Non Basmatti Rice to help fight food inflation. 
  • Chinese wheat imports up 62% year on year but corn imports down 12%. January to July.

 WASDE – GLOBAL GRAIN FOB WHEAT PRICES

September Dalian Corn (China) – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

September Spring Wheat – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

September Chicago Wheat – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

September Corn – BOLLINGER BANDS (18 Day Moving Average Red, 50 Day Black, 100 Day Yellow)

UNITED STATES RAINFALL – WPC 5-7 DAY QPF