Weekly Global Highlights – November 2nd

Written by HawkEye

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Grain markets trading genreally higher for the past week. Wheat markets stole the press for the past five trading days, all three US traded contracts were hit all time highs. Across the pond, MATIF wheat also tickled the top of its historical trading range.

Oilseeds Highlights

  • Soybean oil treading just above water this morning with a few ticks into the green. Soybean Oil weekly values have dropped by just under ½ percent. (0.42%).
  • January canola is the main traded month now as November gets set to roll off the ticker tape shortly. Canola futures have had another positive week, trading up $26.70 per tonne for the week (2.80%)
  • Palm Oil up today but trading down just shy of 1% for the week. (0.86%)
  • Malaysian palm oil exports fell 14% from Septembers totals.
  • Analysts expecting a better upcoming palm oil crop from the southeast Asian region. Better harvestable fruit and less labour shortages are expected going forwards. Lack of labour led to some crops being abandoned during COVID -19 and workarounds are being put in place to prevent this issue again.
  • Australia is poised to harvest a record sized 5 million tonne canola crop this year, following years of drought. Australia is set to ship more than 4 million tonnes of crop, up from 3.1 million tonnes a year prior.
  • The lack of any meaningful negative news from South America regarding their recently planted soybean crop is placing bearish undertones in the marketplace. Planting is progressing ahead of normal and while there are regions of unfavorable growing conditions, there remains the lack of any widespread event yet. (some dryness in small area of Argentina). Brazilian bean crop is 52% planted vs 42% last year.
  • USDA released oilseed crush numbers yesterday. September soybean crush was slightly higher than expected and soybean oil stocks were slightly lower than expected heading into the report, both bullish figures.
    • Soybeans crush came in at 164.2 million bushels vs 163.6 million bushel estimate. Higher than two years ago but below last Septembers record crush figure of 171.1 million tonne.
    • Bean oil ending stocks came in at 2.177 billion pounds vs 2.190 billion pounds expected.
  • US soybean harvest progress is 86% complete vs 81% average. Yields are coming off above expectations in many regions and has potential to be a larger crop than previously thought.

Soybean Oil vs Canola – 9 Month (% Change)

Special Crops

  • Container shipments remain the number one holdup for pulse crop supply chains in many regions of the globe.
  • Port congestion in China is beginning to clear up as wait times have dropped in half in the past three weeks. Port of Los Angeles traffic congestion has increased although and causing issues in North America.
  • Chinese flax imports came in at 32,000 tonnes in September but almost none was of Canadian origin. Old crop / New crop divide coming into play.
  • Canadian flax most expensive in the world right now, can be said about many Canadian crops.
  • Turkish lentil new crop production is expected to fall to 230,000 metric tonnes.
  • Global lentil bids softening as Australian export numbers continue to surpass prior estimates.
  • USDA reduced estimate for US oat imports. Canada will not have the supplies to meet US demand as usual so European imports will need to cover off a portion of demand.
  • Canadian special crops such as flax and red lentils have begun to level off due to demand rationing and losing competitive edge to global counterparts.

Flax Prices and Stocks

Grains

  • Brazilian soybean planting pace is a positive for the second crop corn. The large safrina crop is planted directly after the soybean crop and is poised to be in the ground early and without any trouble if beans start coming off in January.
  • Brazil’s smaller first corn crop is around 75% planted. Argentina is around 35% planted.
  • US corn harvest is 81% completed, blazing ahead of the five-year average 66% complete. Producers are expected to have a open harvest window this week and are set to finish up most of the thrashing in the next ten days.  Crop is quite good in some regions.
  • US winter wheat condition fell 1% this week to 45% good to excellent. Still considered to be in relatively good shape for the crop and the time of year.
  • Wheat markets continue to rally and posted new highs for all three US wheats and European wheat as well. Inflation fear buying is keeping importers on their toes for the fear of shipping issues between Jan to June 2022. Some very strong tenders for wheat have been posted, keeping strength in the marketplace.
  • Spring wheat up $0.42 for the week, up $1.34 for the month.
  • Markets also concerned over smaller 2022 corn area in the United States due to higher input costs and fertilizer requirements.
  • USDA out with their monthly report next Tuesday, November 9th.

Chart of THe Week

Weather

WPC 7 Day Precipitaion Forecast – North America

South America – 7 Day Precipitation Forecasts

Red Areas Highlight Key Production Regions

Canadian Drought Conditions Monitor