Weekly Agri- Commodities Recap: 10-14/06/24
Jun 17, 2024
Start of the week corn and soybeans closed positively, while wheat prices dropped significantly due to ongoing US harvests and Turkey’s ban on wheat imports. MATIF wheat prices fell by nearly 2%, and US wheat futures by over 3%. The US crop progress report provided some support, with corn planting at 95% and soybean planting at 87%. Analysts debated whether Turkey's demand for wheat is lost or deferred and if potential reductions in the Russian wheat crop could offset the ban's impact. IKAR reported a drop in Russian wheat prices, indicating a potential peak in cash markets. Egypt's GASC announced a tender for milling wheat, suggesting that buyers are willing to buy the dips.
Tuesday, wheat prices rebounded after prolonged declines, driven by short-covering and competitive EU offers to GASC. France's farm ministry reported unchanged sowing areas for soft wheat but expected lower yields due to adverse conditions. COCERAL updated its EU crop forecasts, reducing wheat and barley estimates while increasing corn projections. Russia declared a state of emergency in its Rostov region due to drought and frost impacts on winter grains. Egypt's GASC purchased 400,000 tons of milling wheat, and Jordan bought 60,000 tons for July shipment. The USDA reported a private sale of 104,000 tons of soybeans to China, highlighting ongoing export activities. The EU's soft wheat exports reached 28.76 mmt, with corn imports totaling 17.51 mmt.
On Wednesday the USDA report brought minimal surprises, keeping market prices stable. It indicated a reduction in global wheat stocks for major exporters to the lowest level in 17 years, with ending stocks reduced by 1.7 mmt. China’s wheat import forecast for 2023/2024 was raised by 1.5 mmt to 13 mmt, while Turkey’s import forecast for 2024/2025 was lowered by 1 mmt. Non-commercial participants reduced their net long positions in MATIF milling wheat and rapeseeds. US inflation data showed a slight cooling, with the CPI rising by 3.3% year-over-year, down from 3.4% in April. This fueled hopes for future interest rate cuts by the Federal Reserve. However, the Fed's cautious economic projections indicated only one interest rate cut this year, leading to a mixed response in the EUR/USD exchange rate.
Thursday saw mixed price movements. Chicago wheat, corn, and soybeans closed higher, while Kansas wheat and MATIF wheat declined. Brazil's CONAB raised its corn production estimate by 2.5 mmt to 114.1 mmt, although this was still 17.8 mmt lower year-over-year. The soybean production estimate was trimmed slightly. Argentina's wheat plantings were expected to increase, with the Rosario Grain Exchange projecting favorable weather conditions could lead to a harvest exceeding 21 mmt. US weekly export sales for the week ending June 6 were in line with expectations for corn and soybeans but showed sluggish wheat sales. The USDA reported a private sale of 120,000 tons of soybeans for delivery to unknown destinations. China's agriculture ministry reported that recent high temperatures had negatively impacted summer planting activities. The NOAA's Climate Prediction Center indicated a high likelihood of La Niña development, which could persist into the Northern Hemisphere winter, potentially affecting global weather patterns and crop yields.
The week concluded with broad declines in grain prices, led by wheat due to increasing harvest pressure. This negative momentum continued into the early Monday session. Funds maintained a steady net short position in corn but increased shorts in soybeans and Chicago wheat. The EUR/USD remained under pressure following President Macron’s call for a snap election, raising concerns about fiscal instability in France. As of June 10, 62% of French soft wheat was rated good/excellent, unchanged from the previous week but significantly lower than the previous year’s 85%. The Ukrainian Agriculture Ministry increased its grain harvest forecast to 56 mmt, including 21 mmt of wheat and 28.5 mmt of corn. These forecasts were more optimistic than those of the Ukrainian Grain Association and higher than USDA projections.
Weekly Recaps
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Freight Recap:
05/06/25
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The Panamax Atlantic market showed signs of a strong rebound, especially in both the North and South where firmer bids and tightening tonnage contributed to rising sentiment. Fixtures suggested that some charterers may have overplayed their hand, triggering a jump in rates
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Agri- Commodities:
26–30 /5/25 Agri
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Monday opened quietly in Europe as U.S. markets remained closed for Memorial Day. MATIF wheat traded lower in thin volumes, but losses were limited by concerns over dry conditions in France and rising temperatures in Russia. The May JRC MARS Bulletin painted a mixed EU crop outlook, nudging soft wheat yield estimates slightly higher but trimming rapeseed expectations. Meanwhile, geopolitical noise grew louder with President Trump mulling new sanctions against Russia, and Germany lifting range restrictions on Ukrainian strikes using Western weapons.
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Freight Recap:
29/05/25
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The Atlantic market struggled with weak sentiment throughout the week. Following recent holidays, demand remained soft and fresh cargoes were limited, particularly in the North. In the South, while some fixing activity was noted, oversupply of ships continued to weigh heavily on rates. Owners faced increasing pressure as charterers held firm, and some vessels were reported fixing below last done.
Commodities
Agri- Commodities:
19-23/5/25 Agri
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Grain markets exhibited volatility throughout Week 21, with wheat prices leading a mid-week rally before easing slightly into the weekend. Early in the week, MATIF milling wheat weakened in response to Saudi Arabia’s tender, which confirmed continued preference for competitively priced Black Sea wheat. Meanwhile, CBOT futures found strength, buoyed by a broader risk-on sentiment in financial markets after a brief dip following Moody’s downgrade of the U.S. credit rating. U.S. corn inspections came in strong, and planting progress remained well ahead of the five-year average, though winter wheat conditions unexpectedly declined. On the geopolitical front, markets briefly reacted to the news of prospective ceasefire talks between Ukraine and Russia, although subsequent clarifications tempered expectations.
