Weekly Agri- Commodities Recap: 26-30/08/24

The week began with a subdued tone as prices for CBOT corn, wheat, and MATIF milling wheat declined, while soybeans managed to close in positive territory. Traders were cautious, considering the upcoming first notice day for September CBOT futures. The European Commission’s Joint Research Centre (JRC MARS) reduced yield projections for EU soft wheat, corn, and barley due to unfavorable weather conditions. Meanwhile, U.S. crop condition ratings slipped, with corn and soybean conditions slightly below expectations. Despite the general market weakness, soybean prices found some support from a sharp rise in WTI oil prices, driven by concerns over Middle East supply disruptions.

On Tuesday The grain market saw a rebound, with wheat and corn recovering from oversold conditions, while soybeans extended their winning streak, likely supported by bargain buying and weather concerns in the U.S. Jordan’s purchase of 60,000 tons of milling wheat at a lower price than two weeks prior highlighted softening wheat prices.

Mid-week trading was characterized by further gains in MATIF milling wheat, supported by short covering and a weaker EUR/USD. CBOT wheat also posted gains, while corn and soybeans eased as improved U.S. weather forecasts alleviated concerns over potential crop damage. Statistics Canada’s revised wheat production estimate was slightly below expectations but still higher than last year, while canola output exceeded both expectations and last year's figures. In France, updated soft wheat quality data revealed lower protein levels and test weights, although falling numbers were above average, indicating mixed quality results.

On Thursday Grains rallied across the board on Thursday, driven by strong U.S. export sales and further cuts in EU production estimates. U.S. weekly export sales for wheat, corn, and soybeans surpassed expectations, indicating robust international demand. Egypt’s record wheat tender, reportedly driven by geopolitical concerns, underscored the growing demand for wheat amid rising tensions in key exporting regions. Ukrainian grain exports continued at a faster pace than last year, despite the ongoing conflict, suggesting resilience in the country’s export capabilities.

The week ended on a positive note, with wheat prices rising for most of the week, except for Monday. Wheat, corn, and soybean futures closed at or above key psychological levels, supported by fund positioning and strong export demand. SovEcon revised down its Russian wheat production forecast. Speculative funds were less aggressive in shorting CBOT wheat, possibly signaling caution amid price volatility. Inflation data from the U.S. and Eurozone suggested potential interest rate cuts, which could impact currency movements and, by extension, grain prices. Meanwhile, oil prices fell sharply as OPEC+ was expected to increase output, adding a bearish note to the energy complex.