Agri- Commodities: 28/10/2024 - 1/11/24

CBOT grain futures closed lower across the board on Monday, pressured by sharp declines in energy markets, with December MATIF milling wheat the sole exception, posting a modest gain. This gain followed relatively larger recent losses compared to CBOT wheat. Russian wheat prices softened slightly, with IKAR reporting FOB prices for 12.5% protein wheat at $232 per ton, down by $2 week-over-week. Egypt's GASC shifted its purchase of 430,000 tons of wheat to November, adding a delay to the long-rumored purchase. USDA projections for Argentina’s 2024/25 wheat and corn production were set at 18 mmt and 48 mmt, respectively, while Ukraine’s corn production forecast was lowered to 23.3 mmt due to yield challenges. Additionally, U.S. corn and soybean harvests were advancing swiftly, with 81% and 89% complete, respectively, both ahead of last year’s pace. However, winter wheat planting lagged, with 80% sown versus a 5-year average of 84%.

Tuesday saw a reversal in U.S. wheat futures, recovering prior losses on support from poor U.S. winter wheat conditions and an Algerian wheat tender. Corn followed wheat higher, while January soybean futures dropped to contract lows. Algeria’s tender invited offers for December milling wheat shipment, closely watched for potential French or Russian origin. In contrast, Tunisia canceled its tender for 75,000 tons of durum wheat due to high prices. U.S. flash sales were notably absent for the first time in weeks. Meanwhile, incomplete EU customs data showed soft wheat exports at 7.26 mmt as of October 25, a figure up from the prior week but not directly comparable to last year’s levels due to reporting gaps.

Wednesday saw mixed price movements, with oilseed markets gaining on an oil price recovery while corn traded narrowly, ending slightly lower. Wheat showed split results; Chicago and Kansas futures were up, while MATIF wheat declined as a stronger EUR/USD exchange rate pressured European prices. A key development was a 24-hour strike by Argentina’s transportation unions, halting shipping operations at the Rosario ports, causing some support for CBOT futures. USDA reported fresh flash sales, including significant volumes of soybeans and corn to unknown destinations and China. On the speculative side, non-commercials raised short positions in MATIF milling wheat but extended net longs in rapeseed, a contrast driven by bullish sentiment in rapeseed futures.

CBOT prices were mixed on Thursday, with modest day-to-day changes. MATIF wheat again edged lower, struggling for direction amid a strong euro. Rapeseed prices, however, hit new contract highs as February futures rallied. Algeria’s purchase of approximately 600,000 tons of wheat for December shipment at $263 per ton (C&F) barely impacted cash prices despite MATIF declines. The European Commission revised down its 2024 production estimates for soft wheat, maize, and barley due to unfavorable conditions. Additionally, USDA adjusted Argentina’s soybean production estimate to 52 mmt, driven by a shift in acreage from corn to soy. Weekly U.S. export sales data were robust, with notable volumes in corn and soybean sales, keeping export interest strong.

Friday’s session closed with mixed results as traders positioned themselves ahead of the U.S. elections and key economic reports. Corn prices rose, bolstered by strong demand and a USDA announcement of a large private sale to Mexico. Soybeans were stable, while wheat slipped marginally. In fund positioning, net short positions in CBOT corn shrank to their lowest levels this year, with funds seeking a neutral stance amidst election uncertainties. Labor market data showed a modest U.S. job gain of 12,000 in October, below the 2024 average but steady on unemployment. Egypt’s GASC issued a tender for late November and early December wheat shipments, and updates on Russian and Ukrainian exports indicated stable but diverging flows. Russian wheat exports matched last year’s pace, while Ukraine’s exports were up year-over-year.