Agri- Commodities: 14/10/2024 - 18/10/24

The week kicked off with lower grain prices across the board in a session devoid of major news. Improved weather conditions in key production regions like Russia and Brazil contributed to the bearish sentiment. U.S. federal holiday delayed key reports like export inspections and crop progress. Ongoing missile attacks on Ukraine's Black Sea infrastructure, which hit a fourth cargo ship, kept geopolitical risks alive. Russian wheat prices continued to rise, now at $230/ton for 12.5% protein wheat, while Saudi Arabia secured 360k tons of wheat for delivery in early 2025.

On Tuesday, Corn and soybeans saw a fourth consecutive day of losses, driven by rapid U.S. harvest progress and beneficial rains in Brazil. Wheat prices also softened, reflecting favorable weather in Russia and the U.S. Plains. Russia's Grain Exporters Union introduced indicative export prices to stabilize the market, while Brazil's crop estimates were slightly lowered for corn and soybeans. France revised its soft wheat production estimate downward, and EU wheat exports showed a modest increase. U.S. export inspections revealed disappointing corn numbers, and favorable weather accelerated harvests, pushing U.S. corn and soybean harvest progress above five-year averages.

Middle of the week, wheat and corn prices finally reversed their downward trend, though soybeans continued to struggle. A key factor was strong U.S. corn sales, particularly to Mexico. FranceAgriMer kept its wheat export forecast stable but revised down ending stocks due to higher feed use. India raised wheat procurement prices to encourage domestic production. A study highlighted the potential negative impact of a U.S.-China trade war on American grain exports, especially soybeans and corn. Additionally, non-commercial participants extended their long positions in rapeseed, which saw a price increase.

On Thursday, grains rebounded, with soybeans breaking a five-day losing streak due to bargain buying. The International Grains Council maintained its corn and wheat production forecasts for the 2024/25 season. Russia’s approval for Kazakh grain transits, while banning imports, added complexity to regional trade flows. Russian wheat exports remained robust, outpacing last year’s figures for the July-October period. Jordan reissued tenders for wheat and barley after cancellations earlier in the week. The EUR/USD hit a multi-month low as the ECB cut interest rates again, adding pressure to dollar-denominated commodity prices.

Wheat ended the week on a weak note, with Chicago wheat prices falling nearly 3% as traders digested the ongoing impact of Russian grain export dominance. Soybeans also erased Thursday's gains, with favorable weather in Brazil easing concerns about crop losses. The Russian Grain Union's initiative to bypass foreign intermediaries in grain sales could reshape global trade flows. Chinese corn imports plunged 81% year-on-year in September, while wheat imports were also sharply lower. U.S. weekly export sales were strong for corn, reaching levels not seen since March 2023, while speculative short covering in CBOT corn and soybeans wound down after a turbulent week of trading.