Agri- Commodities: 4-8/11/24

Grain prices opened the week with mixed movements; only December MATIF futures saw a notable decline, falling 1.5%. In global trade, Egypt’s GASC secured 290,000 tons of wheat from Ukraine, Bulgaria, and Romania at competitive prices, while Russian and French offers struggled to compete. Meanwhile, U.S. corn and soybean harvests approached completion at 91% and 94%, respectively. Winter wheat plantings reached 87%, buoyed by timely rains improving crop conditions. U.S. weekly export inspections saw soybean focus remain steady, although both corn and wheat inspections slowed seasonally. Additionally, OPEC+ extended output cuts, sparking oil price hikes, an indirect factor for agri-commodity inflation.

On Tuesday, Election Day in the U.S. injected volatility into markets as the election results showed a Trump lead, strengthening the dollar and weakening soybeans, wheat, and corn amid lower commodity pricing power. Grain prices closed higher overall, but MATIF wheat remained flat while rapeseed declined. Jordan secured 60,000 tons of milling wheat at a slight premium over prior purchase, and the USDA reported private sales of 124,000 tons of corn. Anticipation built for Friday’s USDA World Agricultural Supply and Demand Estimates (WASDE), with projections suggesting potential downward revisions in U.S. corn and soybean production and global carryout across major grains.

Middle of the week, markets saw initial pressure following U.S. election outcomes but recovered by the close, aided by gains in Euro-denominated grain prices, driven by a weaker EUR/USD exchange rate. Non-commercial traders were active, expanding net short positions in MATIF wheat while increasing long positions in rapeseed, aligning with a slight price rise. With the Federal Reserve set to cut interest rates by 25 basis points, traders awaited potential policy signals on future rate adjustments amidst recent U.S. election results and slower economic indicators.

On Thursday, Corn and soybeans extended their rally, marking consecutive daily gains driven by a robust vegetable oil market that buoyed soybean prices. Wheat, however, remained range-bound, while MATIF wheat prices continued their subdued trend despite euro weakness. The USDA released its 2025/26 baseline projections, estimating relatively unchanged wheat acreage but modestly higher corn plantings and a reduction in soybean area. Meanwhile, Algeria and Bangladesh issued new wheat and corn tenders, and weekly U.S. export sales were led by strong corn transactions. The Federal Reserve’s rate cut came with caution on future policy adjustments, adding uncertainty to market sentiment.

Friday closed with CBOT corn and soybeans on a positive streak, wrapping up an uninterrupted week of gains, though USDA’s WASDE report provided mixed support. U.S. soybean yield expectations were revised downward from record highs, while projections for average farm prices held steady for corn and soybeans, with a slight drop in wheat price projections. Notably, the USDA reduced China’s corn and wheat import needs by 3 mmt and 0.5 mmt, respectively. More private export sales were reported for corn and soybeans, yet soybean export estimates were adjusted downward, leaving corn projections untouched. Meanwhile, French soft wheat sowing lagged historical averages slightly, and funds turned net-long in corn while holding short positions in soybeans and wheat.