Over the past week, wheat, corn and soyoil futures rose in Chicago, while soybean and soymeal futures fell. In Paris, wheat, corn and rapeseed futures declined.
Over the past week, the EUR/USD currency pair increased by 0.0046 to 1.0586. US WTI crude oil rose by 3.27 USD/barrel to 74.29 USD/barrel.
During the week, the Fed, the ECB and the Bank of England continued to raise interest rates. There were clear signals that rate hikes will continue into 2023. Crude oil prices fell on Friday as markets weighed signs of tightening supply and the possibility of improved demand from China despite downward pressure from rate hikes. Earlier this week, the International Energy Agency (IEA) said prices could start rising again next year when Western sanctions begin to squeeze supply from Moscow. The rapid lifting of anti-epidemic measures in China has fueled optimism about the long-term outlook for demand, although the short-term outlook remains uncertain due to the pandemic and the rise in positive cases of the coronavirus. Consumption may recover as early as the second quarter of next year.
| CBOT Chicago | |||||
| SRW Wheat | month | 03.23 | 07.23 | 09.23 | 12.23 |
| USD/mt | 276.86 | 281.27 | 283.39 | 287.52 | |
| Corn | month | 03.23 | 07.23 | 09.23 | 12.23 |
| USD/mt | 257.08 | 255.21 | 240.25 | 235.23 | |
| Soybeans | month | 01.23 | 03.23 | 07.23 | 11.23 |
| USD/mt | 543.81 | 545.19 | 547.30 | 510.46 |
| EURONEXT Paris | |||||
| Wheat | month | 03.23 | 05.23 | 09.23 | 12.23 |
| EUR/mt | 297.50 | 295.25 | 277.75 | 277.75 | |
| Corn | month | 03.23 | 06.23 | 08.23 | 11.23 |
| EUR/mt | 283.75 | 284.50 | 285.50 | 267.25 | |
| Rapeseed | month | 02.23 | 05.23 | 08.23 | 11.23 |
| EUR/mt | 560.00 | 566.75 | 567.00 | 570.00 |
For the past week, Chicago March SRW wheat futures rose by 19 1/4 cents to close at $7.53 1/2 a bushel.
Over the previous week, CBOT March corn futures in Chicago increased by 9 cents to close at $6.53 a bushel.
Throughout the past week, January soybean futures in Chicago fell by 3 3/4 cents to close at $14.80 a bushel.
Accumulated US Export Sales, for the week ending December 08.
| Total Export Commitments | |||
| US | 22/23 | 21/22 | 20/21 |
| million tons | December 08 | December 09 | December 10 |
| Wheat | 14.110 | 15.210 | 19.649 |
| Corn | 20.003 | 38.511 | 41.580 |
| Soybeans | 41.817 | 40.049 | 53.670 |
| Soymeal | 5.545 | 5.725 | 5.526 |
| Soyoil | 0.030 | 0.319 | 0.406 |
*Source: USDA
The weather in the US Corn Belt has been cold in places with snow over the past week. Weather was dry and cold in the US Wheat Belt. In Europe, temperatures dropped and precipitation fell in places. In Australia the rains are already low. It rained in Brazil except for some southern areas. It remained dry in Argentina.
Over the next 10 days, weather will be cold with snow showers in the US Corn Belt. In the US Wheat Belt, temperatures will drop sharply and by a lot to below -20 degrees without significant snow cover. Apparently, this will be the event of the week. In Western Europe, weather will be relatively warm with a lot of precipitation. In the Balkans, temperatures will stay around 0 degrees and will rise significantly after the middle of the new week, without precipitation. In Ukraine, temperatures will be around 0 degrees without precipitation. In Russia, mostly negative temperatures with light snowfall. In India temperatures will be normal for the season without precipitation. Good rainfall will continue in Indonesia and Malaysia. In Australia, weather will be hot and dry in the west, relatively warm weather with little rainfall in the rest of the productive areas. Rains in Australia have now passed, ie. there is a change in the world’s climate. In Brazil, massive rainfall continues. Only in some southernmost areas there is drought. Moderate temperatures are expected in Argentina, but the drought continues. Some precipitation is expected at the end of the week. For now, the risk areas of the world remain few – the US Wheat Belt and Argentina.
GRAIN EXPORTS:
| US | Week | Accumulated | |
| thds. tons | ended 08.12 | 22/23 | 21/22 |
| Wheat | 255.9 | 10,008 | 10,312 |
| Corn* | 590.5 | 7,264 | 11,645 |
| Soybeans | 1,846 | 23,019 | 25,358 |
| EU | Week | Accumulated | |
| thds. tons | ended 11.12 | 22/23 | 21/22 |
| Wheat | 243.0 | 15,704 | 14,770 |
| Corn* | 9.3 | 602.0 | 2,756 |
| Barley | 9.8 | 2,763 | 4,740 |
| Russia | Week | Accumulated | |
| thds. tons | ended 30.11 | 22/23 | 21/22 |
| Grain | 1,270 | 22,570 | 22,200 |
| Wheat | 1,256 | 19,800 | 18,800 |
| Corn* | 28.0 | 420.0 | 1,000 |
| Barley | 190.0 | 2,130 | 2,300 |
| Ukraine | Week | Accumulated | |
| thds. tons | ended 16.12 | 22/23 | 21/22 |
| Grain | 985.0 | 19,959 | 29,167 |
| Wheat | 265.0 | 7,427 | 15,338 |
| Corn* | 681.0 | 10,913 | 8,412 |
| Barley | 36.0 | 1,539 | 5,100 |
* US (September- August)
* Russia, Ukraine and the EU (July- June)
Soybean exports from the United States continue to be very good, but wheat and corn exports were not that good. Weekly US wheat and corn export sales hit very good levels for the first time in weeks. Soybean sales shine again with a level of 2.94 million tons. Wheat exports from the EU exceeded last year’s by 1 million tons. Wheat exports from Russia are ahead of last year’s. Ukraine continues to maintain a weekly export of about 1 million tons of grain, including 681 thousand tons of corn.
Wheat – Wheat futures in Chicago and Paris fell on Friday. Weekly export sales of wheat from the United States turned out to be strong – 468,962 tons, which if maintained in the coming weeks will be a good signal. There is no good news in the wheat market. Central bank policy suppresses everything. A strong export of wheat is made by the EU, Russia, Canada, Australia. US has potential for strong exports, but high prices suppress it. Ukraine exports evenly and moderately. But we have to keep in mind that the high prices from the middle of the current year were caused by a total stoppage of Ukraine’s exports and difficulties around Russia. However, there is a significant difference now from the conditions then. The upcoming cold weather in the United States and the lack of snow is not reflected by the market so far. Does it really matter how much US wheat rises since demand is already weak and not a benchmark for global prices? The bombings in Ukraine have so far not hampered grain exports and markets are ignoring the news. Wheat areas in Ukraine are 40% lower than last year. Russia is expected to slow wheat exports due to weather and sanctions issues. During the week, there were several major landmark wheat purchase tenders. Algeria has bought 520,000 tons of wheat with prices of 348 – 349 USD/ton C&F and delivery in February 2023. The main supplies are from the Black Sea region. The Philippines has bought 119,000 tons of feed wheat from Australia at 330-335 USD/ton C&F and delivery within March-April 2023. Iraq has announced a tender to buy 50,000 tons of milling wheat from the US, Australia and Canada. Tunisia is looking to buy 100,000 tons of durum wheat of any origin and delivery within January – February. Rusagrotrans lowered its forecast for wheat exports from Russia in December to 4.0-4.3 million tons (4.65 in the previous estimate). During the first 19 weeks of the season, wheat exports from Canada reached 8.8 million tons (+55% compared to the previous year). The Rosario Grain Exchange lowered its forecast for the wheat production in Argentina to 11.5 million tons (11.8 in the previous estimate). France’s winter wheat crops are in excellent condition. The cooling of the continent will not cause damage and it does not worry the markets.
Strategie Grains forecasts a grain production in the EU in 2023/24 of 282.1 million tons (263.9 in 2022/23). The soft wheat production is estimated at 128.7 million tons (125.5), barley production is expected to reach 52.5 million tons (51.3) and corn production is projected at 63.7 million tons (50.5). Hence, a drop in EU grain prices is expected.
Corn – Corn futures in Chicago and Paris decreased marginally on Friday. Weekly US corn export sales rose to 958,920 tons, up 20 million tons from the start of the season, 38% of USDA’s forecast for the year. According to a StoneX forecast, the drought in the Brazilian state of Rio Grande do Sul will reduce the first corn production to 4.51 million tons (5.38 in the preliminary estimate and 2.56 last season). The soybean production is projected to reach 22 million tons (11 last year). The Buenos Aires Grain Exchange reports that as of 15.12.2022 in Argentina, 42.6% of the areas were sown with corn (-5.1% compared to the previous year). Markets do not yet appear to be fazed by the slow pace of the sowing campaign of corn in Argentina. Even if only 18% of the crops have germinated, this is not considered a problem for now. If we look at where we are now as historical price levels we see that we are quite up. Further declines are expected if the South American production is good. The policy implemented by the central banks is hitting cereals very hard, because after all the productions are good and the demand is questionable. Low stock/consumption ratios are not considered for now and everyone is counting what they currently have in their pockets. Another crucial factor is the high prices of mineral fertilizers, including nitrogen fertilizers, which is due not to market mechanisms, but to political factors. High fertilizer prices will feed into the grain and affect its price, but for now this is in perspective. There is still no visible reduction in fertilization rates, i.e. there is no one to stop the grain’s free fall.
Soybeans – Soybean and soymeal futures rose modestly in Chicago on Friday, but soyoil futures fell slightly again. In Paris, rapeseed futures were in green territory. Weekly US soybean export sales are once again very strong. Export commitments are already ahead of last season’s by about 1.8 million tons. Soymeal export commitments are marginally behind the previous year, and export commitments for soyoil are dramatically below 2021/22 levels. The Grain Exchange in Buenos Aires reports that the sowing campaign of soybeans in Argentina has been completed on 50.8% of the planned areas (-14.2%). The private company Planalytics estimates the average soybean yield in Argentina for 2022/23 at 2.79 tons/hectare (3 in the USDA report), and at 3.51 tons/hectare for Brazil (3.54). Soybeans futures rose given the strong US export sales and concerns of dry weather in South America. After the weak decline in soyoil at the end of the week, we can expect the downward pressure to reverse. Soymeal continues to trade around year-to-date highs. Drought in Argentina forced traders to buy soymeal from the United States. It is still too early to make final accurate estimates of productions, but the situation in Argentina and southern parts of Brazil is worrying.
So far, there have been no significant changes in grain production worldwide. World’s soybean production may be enough. The situation around world’s wheat and corn production is still debatable. Almost everyone, no matter how well they earn, limits their consumption of some crops. In difficult times, world’s poorest countries replace every animal product with a plant product, which weighs on animal husbandry, and from there on the consumption of grain. The world demand for meat and dairy products is dying and grain problems follow.
Changes in FOB prices of major exporters in recent days:
| USD/mt | US | Argentina | ||||
| week ended | 09.12 | 16.12 | +/- | 09.12 | 16.12 | +/- |
| Wheat | 325 | 340 | +15 | 430 | 437 | +7 |
| Corn | 305 | 314 | +9 | 291 | 298 | +7 |
| Soybeans | 604 | 603 | -1 | 611 | 627 | +16 |
| USD/mt | Ukraine | France | ||||
| week ended | 09.12 | 16.12 | +/- | 09.12 | 16.12 | +/- |
| Wheat | 314 | 314 | 0 | 334 | 326 | -8 |
| Corn | 255 | 258 | +3 | 310 | 308 | -2 |
| Sunseed | – | – | – | 638 | 621 | -17 |
During the week, FOB crop prices around the world moved in different directions.
Wheat – FOB wheat prices rose in the United States and Argentina and fell in France. Ukrainian wheat remained unchanged. The FOB price of Bulgarian wheat decreased to 323 USD/ton (-1 USD/ton for the week and -2 USD/ton a week earlier). The FOB price of Russian wheat is 297 USD/ton (300 a week earlier). The FOB price of Australian milling wheat is at 361 USD/ton (unchanged for the week and -3 week earlier) but protein wheat 10% is priced at 293 USD/ton (-1 for the week and -3 week earlier).
Corn – FOB corn prices broke the trend in the United States and rose. In Brazil and Argentina, we saw growth for the second week in a row. During the week, the FOB price of Brazilian corn increased by 13 USD/ton to 294 USD/ton (-4 week earlier). The weather situation in Ukraine and Brazil is crucial, but the demand for fodder, which is falling, is already interfering.
Soybeans – FOB soybean prices fluctuated. There was a strong growth in the price of soybeans in Argentina given the severe drought. It is already much more expensive than other competitors. The difference between the prices in the United States and Brazil is minimal – only 2 USD/ton. The FOB price of Brazilian soybeans decreased during the week by 3 USD/ton (+5 a week earlier) to 601 USD/ton.
Export prices Black Sea, USD/mt (compared to the previous week):
| Russia | |||
| months | 12-01 | 02-04 | 04-06 |
| Wheat 12.5% | 303(-3) | 300(-8) | 295(-7) |
| Wheat 11.5% | 273(-1) | 270(-7) | 265(-6) |
| Feed Wheat | 254(-3) | 252(-7) | 248(-6) |
| Ukraine | |||
| months | 12-01 | 01-02 | 02-04 |
| Barley | 265(0) | 257(0) | 251(0) |
| Corn | 258(+3) | 258(+3) | 274(+3) |
| Sunoil | 1,113(-20) | 1,153(0) | – |
