Global Grain Highlights – October 25th

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Oilseeds Highlights

  • Oilseeds higher for the week:
    • Palm oil had a healthy week, up 5.8% for the week.  Up 9.1% for the month.
    • European rapeseed futures up 9.25 euro per tonne for the week.  This is a 1.5% jump for the week. Futures are up 4.0% for the month
    • For reference, Soybean Oil is up 12.9% for the month, Canola futures up 6.0% for the week.
  • Market growing concerned about flooding in palm oil production regions of Malaysian and Indonesia.  Labour shortages for the crop are also causing issues with cultivation of the crop.
  • Markets also concerned that the escalating issues of Russian and Ukraine will continue to hamper sunflower oil production and exports.
  • US dollar index traded lower for the week at 110.99.
    • 1 month the Index is now down 2.77% but is up 15.6% for the year so far.
    • The high dollar value is keeping US commodities relatively expensive to global commodities.
  • US barge traffic in the Missisippi river and its tributaries is causing major issues. Mississippi river accounts for the majority of US grain exports.
    • Record low levels in the river is restricting barge traffic.
    • Last week over 2000 barges were caught in a backlog.
    • Barge traffic has caused inland basis values to increase in the US Midwest.
  • Potential rail strike in the United States is becoming a potential threat.
    • Over half of US unionized rail workers still yet to ratify labour agreements, leaving risk potential for a strike.
  • US inflation report released mid October revealed another month of high numbers.  8.2% was the number for September year over year.
    • Analysts raising the question of the efficacy of interest rate hikes and beginning to point to high energy costs, corporate earnings and supply chain issues.
    • Jumping interest rates are beginning to hurt consumers significantly, many consumers on variable rate loans have reached “trigger points” and have begun paying strictly interest only on their loans, leaving massive equity at risk as housing prices begin to cool.
  • Many analysts are forecasting a global recession for late 2022 and into 2023 as rising interest rates and untamable inflation keep consumer spending at bay.
    • This has weighed on commodity sentiment partly due to perceived weakening demand, especially for high value products.  Consumers switching to inferior food items leaves less discretionary spending available to be used towards high cost protein and fats, essentially lowering demand for many items.
  • Increasing market chatter that the Russian and Ukranian grain trade corridor will not be extended come late November.
    • Russia is being accused of regulatory stalling tactics to create ship backlogs in Ukraine.
    • The grain corridor deal is set to expire on November 19th unless there is a renewal installed
    • G20 Summit is set to take place on November 15th and 16th. Russia’s Vladmir Putin is expected to be in attendance.
  • Commodity markets lacking any major news outside of the Russian and Ukranian conflict to begin the week.  It is important to keep in mind the old adage, “Bulls need to be fed everyday”
  • Weather in South America will begin to take a larger precedent in global agri trade.
    • Brazil moisture good for the time being, some reports of excessive moisture in pockets of production regions
  • Ruble has picked up all of its losses and gained some value in its currency since 1 year ago.
  • USDA WASDE highlights from October report:
    • Brazils 2022/23 soybean crop size estimates were bumped higher by 3 million tonnes to take the crop to a massive 152 mmt.  The crop is just being planted and is in the early stages at best.  Harvest will commence in February – March and markets will begin to focus on South American weather shortly
    • For reference, Brazils most recently harvested soybean crop from this spring came in at 127 mmt.
    • US soybean estimates fell to 49.8 bushels per acre.  This is the lower level of estimates heading into the report
  • Brazil 2022/23 soy crop private analyst preliminary estimates mostly over 150 mmt. The crop is just beginning to be planted and analysts are using expected acres.  If realized, this would be a 21% increase in production. USDA placed the crop at 152 mmt in Octobers report. Soil Moisture conditions are posted below.
  • Argentina is facing some troubling drought conditions.
  • China very dry, affecting soy and corn regions but most focus is on primary Rice regions.

Global Vegetable Oil Pricing

USDA WASDE DATA – October 2022

Special Crops

    • Flax exports from Russia hit a record 975,000 tonnes in 2021/22
      • Russia has been flooding several markets with Flax this year so far as well and it is hurting North American export prospects.
    • Moisture conditions in India coming in well for pea and chickpea production regions. Plantings of these crops are expected to be slightly lower for the year but the positive moisture conditions could help make up the difference.
    • Argentinian export pace of Canary seed has been quite aggressive recently, the heaviest movement in 10 years.
    • Durum bids in North America turning higher.
    • Container shipping rates falling significantly, although logistics still a problem.
      • Baltic Index tracked US to China container rates around half of July levels. Below $3,000 for the first time in nearly two years.
    • Brazilian Sugarcane crop expected to be the smallest since 2011, resulting in a lower supply available for the nations ethanol market.
    • Ukrainian Barley export availability expected to fall significantly,
    • Australia expected to harvest another large Barley crop, although it is mostly making its way into Saudi Arabia and Middle Eastern markets as the Chinese Market is still off limits.
    • European Durum crop is expected to fall to 6.9 mmt, 800,000 tonnes lower than last years production.
    • Canadian Durum crop expected to be of high quality, over half as a #1.
    • Canadian flax exports are slower, larger than expected ending stocks come in. Most since 2017/18
    • India has announced Lentils will remain exempt from levy of 10% until March 31st

South American SOil Moisture



  • Wheat futures down on all three major US contracts, Corn and Soybean Meal higher.
  • Ukranian barley exports have been very slow, helping support Canadian and other exporters prices.
  • Ukraine is expected to face a 30% to 40% drop in its winter wheat acres planted.
    • Input Financing, logistical issues and the fact the nation is at war sum up most of the cause for the drop in acres.
  • US transportation hurting inland basis levels.
    • Union representing some US railway workers has rejected a recent tentative agreement which reintroduces the possibility of another nationwide rail strike. If nothing is agreed to before November 19th, strike could become the result for US rail system. November 19th is also when Ukraine / Russia grain corridor expires.
    • US barge system facing restrictive water levels in the Mississippi River.  Barge traffic has become massively restricted in recent weeks.
    • Restricted barge traffic is widening out basis levels for Corn and Soybeans for US growers in the basins draw region.
      • Nearly two thirds of US corn destined for export is shipped through the US Gulf coast. See figure below.
  • USDA October highlights
    • US corn yields fall to 171.9 from 172.5 bpa last report.  Good yields in Illinois, Ohio, Indiana while South Dakota, Nebraska, Kansas, Texas and a handful of other smaller production states all fall from last months report.
    • Global corn stocks came in 3 mmt lower for this months report, come in at 301.2 mmt.  Soybean stocks 1.5 mmt higher at 100.5 mmt, Wheat 1 mmt lower at 267.5 mmt
  •  Russian crop size is expected to be quite large, which some analysts are pushing towards the mega 100mmt mark. This would easily be 10mmt to 15mmt over a previous record crop size.
    • Winter wheat plantings in the black sea are already suffering for the next season.
  • US winter wheat plantings are falling behind pace and producers are planting once again into very dry soils.
    • US winter wheat acreage is critical to the overall US wheat crop. Over 70% of US wheat production falls into the winter wheat category, 30% falls into spring wheat and durum (mostly spring wheat)
  • Russia also expects to add 5mmt to its harvested area due to newly annexed regions of Ukraine.
  • This also raises the markets question as to if the Ukraine grain corridor will be extended past its November 19 deadline.
  • US federal reserve raised its interest rates 0.75% in September.  Security backed Mortgage and Loan products in North America sit between 5.5% and 7.5% in many locations.  Cost of debt has risen significantly for many operations in the past year.
  • More rate hikes expected to come.  Canada expecting a 0.5% to 1.00% hike this week. (October 26th)
  • Fertilizer prices do not bode well for high input corn crops globally going forwards, bearish soybeans.
  • Europe’s corn crop is expected to be the smallest in 15 years.
  • Ukrainian wheat production seen falling to 17.4 mmt by private analysts. This is down from roughly 33mmt in the year prior.



Chinese Soybean and Corn Highlight