Agri- Commodities: 30/09/2024 - 4/10/24

Corn prices surged on Monday, fueled by tighter-than-expected U.S. ending stocks for 2023/24. Wheat followed with moderate gains, though its stock figures were less supportive. Soybeans, however, slipped as forecasts pointed to wetter conditions in Brazil’s growing regions. A significant factor looming over the week was the strike by dockworkers across U.S. East and Gulf Coast ports, which raised concerns over supply chain disruptions. Meanwhile, U.S. grain stock reports painted a mixed picture: corn stocks were 29% higher year-on-year but missed expectations, while soybean and wheat stock levels were more aligned with projections. Harvest progress showed that U.S. farmers had collected 21% of corn and 26% of soybeans by the end of September.

Wheat and corn extended gains on Tuesday, driven by heightened geopolitical risks and weather concerns in key Russian grain regions. CBOT wheat December futures surpassed the 600 mark, while corn hit levels not seen since June, breaching the 100-day moving average. Iran's missile attack on Israel exacerbated tensions in the Middle East, sending oil prices sharply higher. Meanwhile, reports indicated that Morocco would likely increase its wheat imports from Russia over France due to poor French harvest conditions. USDA data confirmed strong private sales of corn and soybeans, offering further support to the grain markets.

Wheat dominated the market on Wednesday, with short covering and supportive news driving prices higher. Corn posted smaller gains but lacked a strong narrative. Market focus shifted to Russia and Ukraine, where Russian drone attacks on grain facilities raised concerns over supply disruptions. Russia also warned of unfavorable weather for winter crops, further elevating wheat prices. Egypt continued to secure large wheat purchases from Black Sea origins, while Algeria issued a new tender for corn.

The rally in corn and wheat paused on Thursday as prices retreated amidst lighter news flow. Weather forecasts pointed to favorable U.S. harvest conditions over the weekend, while oil prices continued to rise amid escalating tensions in the Middle East. Reports suggested that China’s corn and wheat imports may fall below USDA projections, adding some bearish sentiment to the market. Despite this, U.S. weekly export sales revealed robust demand, particularly for corn, which exceeded expectations at 1.68 million tons.

Grain prices edged lower on Friday, pressured by an advancing U.S. harvest and a strengthening U.S. dollar. Traders braced for a potentially turbulent week ahead, with upcoming U.S. inflation data and Friday’s USDA WASDE report expected to bring significant market impacts. Fieldwork delays in France and a strong Kazakh wheat harvest provided mixed signals for global supply. In terms of fund activity, large short-covering positions were evident in corn and soybeans, while wheat saw more modest position adjustments despite a recent price rally.