AGRIWEEK: Key Insights for October 4, 2024 Revealed! | (AGRIWEEK – October 04, 2024)

October 04, 2024

Wheat markets finally showing some life

The wheat market is finally showing some signs of life after dropping steadily over the past four months. Prices had been declining due to the perception that there was plenty of wheat available in the global market. This caused wheat markets to drop precipitously at the end of May. Wheat futures have come to life in the past week and is now hitting four-month highs.

What has been behind the change in market sentiment for wheat? The first factor has been drought in the Black Sea region which is slowing planting in this major producing region. Secondly, crop prospects in the southern hemisphere continue to deteriorate with Australia and Argentina suffering from drought conditions. Lastly, the announcement of a major purchase of wheat by Egypt this week has highlighted the strength of wheat demand this year.

Egypt covered demand for the next seven months. When the world’s largest wheat importer secures seven months of supply then other importers take notice. With limited supplies in Europe and the Black Sea this year, importers are beginning to scramble to secure supplies for the upcoming months. Wheat demand had been slow over the summer as the northern hemisphere harvest reached its peak. Buyers remained spot purchasers of wheat after the harvest and were reluctant to forward purchase significant amounts. The purchase by Egypt signals an abrupt change to the psychology of major buyers in the coming months.

Drought in Argentina and Australia is occurring at exactly the wrong time for crops in both countries. Crops are entering the critical reproductive stage in the southern hemisphere and drought conditions are pulling yield estimates lower. There is some time for the crops to recover, but the healthy expectations of a few months ago have rapidly disappeared. Crop prospects in Argentina and Australia are not headed for disaster by any means. Wheat production will be higher in Argentina and Australia than last year. What has changed is that expectations for even more production from the southern hemisphere are beginning to fade.

Time is running out for winter wheat planting and crop establishment in Ukraine and Russia. This is probably the most critical situation for the wheat market as the planting window will close in both countries by the end of the month. Not only does the crop need to be planted, but the fields need to become established to withstand the cold Russian winter. That is the reason behind the new-found urgency in the wheat market during this past week.

Readers should be aware that the wheat market is beginning to trade some of the fundamentals that have been present over the past few months. What has changed is that a weather market has developed threatening the 2025 crop. Weather markets are notorious for volatility and there is no reason to believe that this one will be any different.

Anyone who has wandered in their fertilizer dealership this fall likely left scratching their head. Prices are close to last year’s levels and in our local area are slightly higher than last year. With cash grain prices down by about 20 to 30 per cent from last year, pencilling in no change in fertilizer prices is creating a lot of red ink in crop budgets. The news in fertilizer markets is getting even worse as urea prices in New Orleans have jumped by close to four per cent over the past week. Prices for crop inputs are not making much sense considering the new commodity price regime.

Reuters: Russia’s winter crops dry

Russia’s weather forecast agency said conditions for winter crops in some key producing regions were “worse than usual” in October due to a lack of precipitation.

The agency mentioned the Central, Southern, North-Caucasus, and parts of the Volga regions.

“A precipitation deficit will persist, and the conditions for the emergence and growth of winter crops in most areas will be worse than usual,” the agency said.

The Sovecon consultancy said on Sept. 25 that winter wheat sowing rates in Russia have fallen to an 11-year low due to drought in key producing regions, clouding the outlook for the 2025 grain harvest.

Russia’s Voronezh region, one of the country’s key farming areas for grain and sugar beet, on Tuesday declared a state of emergency due to drought, the local agriculture ministry said.

Voronezh was Russia’s fifth-largest grain-producing region in 2023, with a harvest of over six million tonnes, four per cent of the nationwide total.

This year, the region expects a harvest of 4.5-5.0 million tonnes. It declared a previous emergency – a measure that allows farmers to obtain insurance payments and government support — after frosts in May.

Russia, the world’s biggest wheat exporter, has so far stuck to its official grain harvest forecast of 132 million tonnes despite extreme weather hitting many of its key grain-producing regions this year. That compares with 148 million tonnes in 2023 and a record 158 million tonnes in 2022.

 

India’s monsoon rains hit four-year high

Reuters reports that India’s monsoon rainfall this year was its highest since 2020, with above-average precipitation for three consecutive months, helping the country recover from last year’s drought, the state-run weather department said September 30.

India’s annual monsoon provides almost 70 per cent of the rain it needs to water farms and replenish reservoirs and aquifers. The monsoon is the lifeblood of a nearly US$3.5 trillion economy. Without irrigation, nearly half of Indian farmland depends on the rains that usually run from June to September.

Rainfall over the country from June through September was 107.6 per cent of its long period average, the highest since 2020, according to the India Meteorological Department (IMD).

India received 11.6 per cent more rainfall than average in September, following nine per cent and 15.3 per cent above-average rainfall in July and August respectively, the IMD data showed.

Above-average rainfall in September, arising from a delayed monsoon withdrawal, damaged some summer-sown crops like rice, cotton, soybean, corn, and pulses in certain regions of India.

However, the rains may also enhance soil moisture, benefiting the planting of winter-sown crops such as wheat, rapeseed, and chickpea.

India badly needed good rainfall in 2024 after its driest year in five years in 2023, which depleted reservoir levels and trimmed production of some crops. This forced New Delhi to impose curbs on exports of rice, sugar and onions.

Rainfall distribution was generally good, which helped farmers expand areas under most crops, said Ashwini Bansod, vice president of commodities research at Phillip Capital India.

“This means we could have larger harvests of some summer-sown crops, potentially helping the government to relax trade restrictions in certain cases,” she said.

India on Sept. 28 lifted curbs on exports of non-basmati white rice. That came a day after New Delhi cut export duty on parboiled rice to 10 per cent, buoyed by a new crop in the offing and higher inventories in state warehouses.

EU soft wheat exports down by 26 per cent this crop year

Soft wheat exports from the European Union since the start of the 2024-25 season in July had reached 6.14 million tonnes by Sept. 29, down 26 per cent from a year earlier, according to data published by the European Commission Oct. 1.

EU barley exports totalled 1.52 million tons, down 34 per cent from the corresponding period in 2023-24.

A breakdown of this season’s volume showed Romania was the leading EU soft wheat exporter, with 2.04 million tonnes so far, followed by Lithuania with 917,000, Bulgaria at 615,000, Latvia at 609,000 and France with 560,000 tonnes each.

The main destinations for EU soft wheat exports so far in 2024-25 were Nigeria at 907,138 tonnes, Egypt at 691,6983 tonnes and Morocco at 489,464 tonnes. Algeria imported 450,704 tonnes and surprisingly the fifth largest importer was the UK.

The EU also imported significant amounts of soft wheat from Ukraine (1,384,514 tonnes) and Moldova (222,223 tonnes). The primary supplier of corn to the EU was Ukraine at 2.58 million tonnes and the U.S. at 914,141 tonnes.

EU maize imports were at 5.17 million tonnes, up 13 per cent from a year earlier, while EU soft wheat imports were up one per cent from a year ago at 2.02 million tonnes.

Egypt purchases 3.12 million tonnes of wheat

Egypt’s state grains buyer has struck one of its largest ever direct wheat deals for monthly supplies from November to April, two sources with direct knowledge of the matter told Reuters.

The wheat will be shipped to the General Authority for Supply Commodities (GASC) with around 510,000 tonnes to be supplied every month sourced from Black Sea origins and totalling up to 3.12 million tonnes over the period, one of the sources said.

Egypt is one of the world’s biggest wheat importers and uses the purchases to make heavily subsidized bread, a politically sensitive benefit available to tens of millions of people.

The state buyer usually buys the strategic commodity through transparent international tenders that move the global grains market.

It has opted to buy wheat privately through direct deals in recent years to garner more competitive prices, with this newest deal marking its largest ever agreement.

The deal is set to be supplied by a joint venture between an Egyptian entity and a major global supplier monthly, the source said without disclosing the names of the companies due to the sensitivity of the matter.

The joint venture had already agreed to supply GASC with 430,000 tonnes for October shipment, Reuters reported last month.

The price for the deal will be agreed upon based on market prices monthly, the same source said.

GASC did not respond to a request for comment.

Some traders have cast doubt on whether the deal will be fulfilled, with one saying that it could be conditional on whether the company will be able to fulfill its October shipment.

GASC had tried to secure a similar quantity through its largest ever tender in August, which was personally ordered by Egyptian President Abdel Fattah al-Sisi because of food security concerns sparked by an intelligence briefing.

Egypt has suffered several financial shocks in recent years including from Russia’s invasion of Ukraine in 2022, which disrupted supply chains and caused global wheat prices to skyrocket.

The North African country has also been struggling with an acute foreign currency shortage, rising debt, record-high inflation and rolling blackouts over the past two years that have led to growing frustrations among Egyptians.

USDA reports bullish for grains

The USDA September 1 Grain Stocks and Small Grains Report were bullish for grains and neutral for oilseeds. Leading the way was U.S. spring wheat production which dropped by only by two million bushels to 542 million bushels. The small drop in Other Spring Wheat masked a more substantial decline in HRS production. HRS production dropped by 21.5 million bushels to 446.5 million bushels. The main reason for the production decline was a reduction of the yield forecast for Montana by four bushels per acre to 26 bushels per acre. The drop in Montana yields were partially offset by a three bushel per acre increase in North Dakota to 59 bushels per acre. The decline in HRS production is supportive for the Minneapolis market in the coming months.

Corn ending stocks were bullish and were much lower than pre-report estimates. The trade was expecting September 1 ending stocks to increase to 1.844 billion bushels, but instead they dropped by 52 million bushels to 1.76 billion bushels. This is still above the 2022-23 ending stocks by 400 million bushels. The good news is USDA will likely reduce the ending stocks for the 2024-25 crop year from the current forecast of 2.057 billion bushels closer to 2.0 billion bushels. That should not only support corn values but will also push wheat higher.

Soybean ending stocks were estimated at 342 million bushels which was two million bushels higher than the mid-September ending stocks estimate. The increase was not material enough to change the price outlook for the 2024-25 crop year. Remember that USDA’s forecast for 2024-25 crop year ending stocks is 550 million bushels, which would be the second highest in the past 10 years. The positive news in the report was that the 2023-24 ending stocks will not add to the current year ending stocks. The price outlook for soybeans doesn’t change because of the grain stocks report.

More U.S. health workers show symptoms after patient contact

Four additional healthcare workers in Missouri who came into contact with a hospitalized bird flu patient developed mild respiratory symptoms, but the virus was not confirmed in any of them, U.S. health officials said.

The report from the U.S. Centers for Disease Control and Prevention brings to six the number of healthcare workers who cared for the Missouri patient and developed respiratory symptoms.

Unlike previous U.S. bird flu cases this year, the Missouri patient, who was hospitalized on Aug. 22, had no known contact with infected animals. Scientists are watching closely for signs that the virus has begun to spread more easily in people.

Missouri is leading an investigation with CDC assisting remotely. Missouri health department spokeswoman Lisa Cox said in an emailed statement that the investigation is ongoing and there is currently no evidence of person-to-person transmission.

 

Rising prices, shrinking herd

High calf prices are giving producers an incentive to exit the business rather than rebuild herds, industry insiders told the Manitoba Co-operator.

The cow herd continues to shrink across Western Canada despite record cattle prices and lower interest rates.

“We have a number of producers that are close to retirement age that have made peace with the taxman, and they’re dispersing their cows this fall,” said Rick Wright, executive administrator of the Livestock Markets Association of Canada.

From 2021 to 2024, the number of cattle on Prairie beef farms dropped by 650,000 head, or 7.3 per cent from a total of 8.89 million in 2021 to 8.24 million this July.

Statistics Canada put Canada’s total beef herd at just over 10.777 million in 2021. In 2024, the estimated beef herd was just 10.079 million.

“This is an unheard-of scenario,” said Matthew Atkinson, president of Manitoba Beef Producers. “We have record cattle prices, relatively cheap money (low interest rates), and we also have low feed costs and an abundance of feed.”

With strong heifer prices, producers are converting them to cash flow rather than adding to their winter workload. “By the time we get the numbers in, in December, we’ll probably see another decrease in the number of beef cows,” Wright said.

However, carcass weights are rising and there is an uptick in dairy-on-beef feeding programs, which should sustain beef supplies, despite the drop in beef herds.

Canadian diesel prices

Canadian wholesale diesel prices increased for the second consecutive week on October 1 with the weekly average rising to 98.3 cents per litre. Diesel prices dropped by 18.9 cents per litre from the second week of July to the third week of September. The past two weeks have seen a rise in the Canadian average by 3.3 cents per litre. The current price for diesel is the third highest in the past five years.

Consumer habits changing

Reuters is reporting that Conagra’s reported first-quarter results missed Wall Street estimates as budget-conscious consumers prioritized spending on lower-priced alternatives over the company’s higher-priced pantry staples, sending its shares down about seven per cent.

Like other U.S. packaged food companies, Conagra has seen demand take a hit from prior price hikes on its frozen meals and Slim Jim beef jerky, with shoppers opting for cheaper private label brands.

Volumes at Conagra’s grocery and snacks unit, which accounts for most of the company’s revenue, fell 1.8 per cent, while its foodservice segment volumes dropped 11.1 per cent

“Drastic changes in consumer shopping habits seen in the past few years are likely to be more permanent than previously thought,” eMarketer analyst Blake Droesch said.

“Companies such as Conagra will need to innovate to meet the demands of the modern consumer.”

White House backs U.S dockworkers’ strike

President Joe Biden’s administration pressured U.S. port employers to raise their offer to secure a labour deal with striking dockworkers, choking half the country’s ocean shipping, Reuters reports.

The strike by the International Longshoremen’s Association (ILA) union has blocked goods from food to automobile shipments across dozens of ports from Maine to Texas.

“Foreign ocean carriers have made record profits since the pandemic, when longshoremen put themselves at risk to keep ports open. It’s time those ocean carriers offered a strong and fair contract that reflects ILA workers’ contribution to our economy and to their record profits,” Biden said in a post on X late on Oct. 1.

The ILA, which represents 45,000 port workers, launched its strike just after midnight on Tuesday after negotiations with the United States Maritime Alliance (USMX) for a new six-year contract collapsed.

USMX had offered the union a 50 per cent wage hike, but the ILA’s fiery leader, Harold Daggett, said the union is pushing for more, including a $5 per hour raise for each year of the new six-year contract and an end to port automation projects that threaten union jobs.

Ukraine exports fall in September

Reuters reports that Ukrainian grain exports fell 16 per cent to three million tonnes in September from August, the UAC farm business association said Oct. 1.

The association said in a statement that wheat shipments had dominated last month’s exports, totalling 78 per cent of the volume.

UAC said farmers’ desire not to sell their produce immediately after harvest at the lowest price was the reason for the smaller shipments.

H5N1 bird flu hits Hungary and Italy, WOAH says

Hungary and Italy have both reported an outbreak of the severe H5N1 avian influenza virus in the first such cases in the countries for several months, the World Organization for Animal Health (WOAH) said, as the disease spreads again in Europe.

The case in Hungary involved a farm in the east of the country while the Italian outbreak occurred on a farm in the northeast, Paris-based WOAH said in notices, citing information from national authorities.

Hurricane Helene update

Hurricane Helene has left a large path of destruction across the southeastern U.S. The death toll from the storm is currently 190 but is expected to rise in the coming days. The main damage has been caused by excessive rainfall from Florida to Tennessee. Precipitation amounts in this region ranged from 100 to 400 mm with North Carolina experiencing some of the worst flooding conditions. The rains slowed the corn and soybean harvest in southern Illinois, Indiana, Kentucky and Tennessee.  Damage to the crop was relatively minor compared to the devastation in the Appalachian region.

Manitoba crop report

Warm and dry conditions across Manitoba allowed the province’s harvest to be nearly three-quarters complete at the end of September, according to the provincial agriculture department’s weekly crop report.

Combining advanced 15 points from the week before at 73 per cent as of Sept. 30. Barley and oats were 98 per cent finished and spring wheat was at 95 per cent complete. Canola acres were 78 per cent harvested, while dry beans were at 60 per cent. Manitoba’s soybean harvest was at 29 per cent complete.

Saskatchewan crop report

Harvest progress was aided by warm and dry conditions last week across the province. Harvest progress moved up by 12 per cent to 91 per cent complete. Spring wheat harvest moved up to 96 per cent complete, while canola is 82 per cent finished. Soil moisture conditions continued to move lower last week, but topsoil moisture conditions were rated as 60 per cent adequate.

Alberta crop report

The combining of major crops in Alberta advanced 11 points during the week ended Sept. 24 to 74 per cent complete, said the province’s latest crop report. Rain in all of Alberta’s regions slowed the harvest, but the pace remained well ahead of the five-year average of 62 per cent done.

Among the spring cereals, durum reached 93 per cent complete, with spring wheat and barley at 87 per cent, and oats at 69 per cent. Mustard led the oilseeds at 86 per cent combined, canola at 49 per cent and flax at 34 per cent. For the pulses, dry peas were virtually complete at just short of 100 per cent, with the lentils at 95 per cent.

CGC weekly exports

Weekly exports declined this past week with total exports dropping slightly to 985,200 tonnes according to the CGC Weekly Grain Statistics report. This pushed total crop year to date exports to 5.69 million tonnes, which is 1.48 million tonnes ahead of last year. Canola is leading the way this year and accounts for the bulk of the increased exports this year.

Exports of wheat were also strong last week with 330,200 tonnes shipped during the week. Canola exports during the past week were strong at 228,600 tonnes which pushed the total canola exports this crop year to 1.68 million tonnes. Durum exports rebounded this past week with 71,900 tonnes shipped during the past week. Canadian pea exports remained strong last week with a total of 199,400 tonnes shipped from Vancouver terminals.

Analysts cut Australian wheat production

Reuters reports that dry weather and frosts in parts of Australia have damaged crops and will likely reduce wheat production by well over a million tonnes from earlier estimates, analysts said, as key global producers of the grain grapple with harsh growing conditions.

“A dry start to spring across most regions, coupled with widespread frost damage in New South Wales, Victoria and South Australia, has negatively impacted yield estimates,” said Rod Baker at Australian Crop Forecasters in Perth.

Baker said he had revised his wheat harvest estimate to 30 million tonnes or less from 31.7 million tonnes in August and that rain would be needed in October to prevent further losses.

U.S. export sales

U.S. wheat sales jumped to 443,700 tonnes during the week ending September 26.  Exports during the past week were also strong at 531,700 tonnes which pushed total commitments for U.S. wheat to 11.6 million tonnes. Spring wheat export sales were good last week at 142,167 tonnes while exports were 234,952 tonnes.

Corn sales were very strong last week with 1.68 million tonnes purchased by regular customers of U.S. corn. Total commitments for U.S. corn stand at 16.4 million tonnes which is the fastest pace in the past three years. This is helping support corn prices in the face of the ongoing harvest.

Soybean sales were strong at 1.44 million tonnes during the past week while exports were also strong at 724,600 tonnes. Total soybean commitments for the 2024-25 crop year stand at 18.9 million tonnes which is only slightly larger than last year.

Oilseed prices rallied over the past week with nearby soybean futures up by five cents per bushel. Canola markets staged a major rally this past week with nearby futures up by C$ 21.10 per tonne. Oilseed markets were supported by a rally in soybean oil which closed the week up by 1.63 cents per pound to 44.5 US cents per pound.

Corn futures were up by 15 cents per bushel from last week which helped support a rally in the wheat market. Oat futures traded sideways during the week with nearby contracts up by four cents per bushel over the past week. Cash oat prices were up by only 98 cents per tonne in Saskatchewan. Cash barley prices in Alberta increased by C$5.88 per tonne during the past week.

Wheat staged a major rally this past week with both futures and basis rallying during the past week. Chicago SRW futures improved by 21 cents per bushel, while Minneapolis futures gained by 34 cents per bushel. Kansas City futures closed the week up by 33 cents per bushel. Milling wheat cash prices over the past week rallied by C$6.45 to C$7.85 per tonne.

Live cattle and feeder cattle futures prices increased by US$2.97 and US$3.63 per hundred weight, respectively. Hog futures dropped by US$0.05 per hundred weight.

Weekly Chicago December Corn Futures

Weekly Chicago December Wheat Futures

Weekly Minneapolis December Wheat Futures

Weekly Kansas City December Wheat Futures

Weekly Chicago Soybeans November Futures

Weekly ICE Canola November Futures

 

Have markets forgotten about risk?

One of the breathtaking moves in the commodity markets over the past two years has been the total loss of war/political risk premiums in the futures markets. This came to the forefront this week when Iran launched missiles at Israel. The response in the oil market was immediate and swift with nearby WTI crude oil contracts experiencing a trading range of nearly US$5.30 per barrel October 1. It was as if the market finally paid some attention to the political risks associated with crude oil markets are currently trading up by US$6.00 per barrel from the mid-September lows.

The oil markets have had plenty of warnings that the situation in the Middle East is escalating, starting with the Oct. 7, 2023 Hamas attack on Israeli civilians attending a music festival. The price of crude oil was hovering around the US$90 per barrel mark when the attack occurred a year ago. The market has taken close to US$20 per barrel of risk premium out of the nearby futures markets since the event.

Most of the decline in crude oil is due to fundamental factors of increased supply and slowing demand. The markets seemed to forget that there was still a conflict going on between Israel and Iranian proxies in the region.

Managed money funds have played a role in the removal of risk premium. Managed money funds have been reducing their long position in WTI futures to the point that they were at a record low last month. Funds even went net short the Brent crude oil contract for a brief period a couple of weeks ago. All this short-selling activity occurred despite the threat of war in the Middle East.

The same situation is occurring in the grain and oilseed markets. Funds continue to establish short positions in wheat, corn, soybeans and wheat. Although funds have been easing their short position recently, they remain decidedly bearish agricultural commodities. This short position has been established despite the ongoing war between Russia and Ukraine. The market, especially the managed money fund participants, seem to be perfectly at ease with the current conflict in Ukraine. This seems odd as this region has the world’s largest, Russia and sixth largest, Ukraine, exporters of wheat in the world.

It is easy to blame managed money funds for all the missteps in the futures markets. It is important to realize that funds provide much needed liquidity for the commodity markets. The main reason that markets rallied at the beginning of the war in 2022 was fund activity that moved to the long side of the market. We can’t complain about the fund selling on the one hand and cheering on fund buying on the other.

The key to trading fund-driven markets seems to be that you should not expect risk premiums to be a significant factor in price discovery in the coming months or years. Funds will be focused on other factors in determining their position in the futures market. When they are surprised by events such as war, they will rapidly change their stance. This will present some marketing opportunities for farmers in the future.

October 04, 2024

Wheat Markets Starting to Show Improvement

The wheat market is beginning to recover after a steady decline over the past four months. Prices had dropped because many believed there was an abundance of wheat globally, leading to a significant price drop at the end of May. However, in the past week, wheat futures have surged, reaching four-month highs.

What has caused this shift in the wheat market? First, drought conditions in the Black Sea region are delaying planting in this major producing area. Second, crop forecasts are worsening in Australia and Argentina due to drought. Lastly, Egypt’s announcement of a significant wheat purchase this week has emphasized strong demand for wheat this year.

Egypt has secured supplies for the next seven months. When the world’s largest wheat importer makes such a large purchase, other importers take notice. With limited supplies available in Europe and the Black Sea, importers are now eager to acquire supplies for the upcoming months. Demand for wheat was slow during the summer as Northern Hemisphere harvests peaked, but Egypt’s purchase indicates a sudden change in buyer mentality moving forward.

Drought in Argentina and Australia is hitting crops at a critical growing period, causing yield estimates to drop. While wheat production in both countries is expected to be higher than last year, the hopes for even larger production have faded.

The window for winter wheat planting in Ukraine and Russia is closing, creating urgency in the wheat market. Planting must be completed soon for crops to survive the harsh winter, adding to the recent market activity.

The current wheat market is beginning to react to some known fundamentals, but now a weather-related market is emerging that threatens the 2025 crop. Weather markets often experience significant price volatility.

Fertilizer Prices Confusion

This fall, many farmers are confused about fertilizer prices, which remain similar to or slightly higher than last year’s rates, despite a drop in cash grain prices of about 20-30%. This discrepancy is leading to significant losses in crop budgets. Urea prices in New Orleans have jumped by nearly four percent over the last week, further complicating the situation.

Russia’s Winter Crops Concerns

Russia is facing challenging conditions for winter crops in key regions due to low rainfall, according to the country’s weather agency. Areas including Central and Southern Russia are reporting poor growing conditions. The Sovecon consultancy noted that winter wheat sowing rates are at an 11-year low, raising concerns about the 2025 grain harvest.

The Voronezh region in Russia has declared a state of emergency due to drought, which significantly affects its grain production capabilities.

India’s Monsoon Rains

India has experienced its highest monsoon rainfall in four years, recovering from last year’s drought conditions. This year’s rains, which provide essential water for crops, have proven beneficial overall, although some summer crops were damaged due to heavy rainfall.

EU Wheat Exports Decline

The European Union has exported significantly less soft wheat compared to last year, with exports down 26% as of September 29. Romania leads the EU in wheat exports, followed by Lithuania and Bulgaria.

Egypt’s Major Wheat Purchase

Egypt has made one of its largest wheat purchases, securing 3.12 million tonnes for the upcoming months. This purchase is critical for the production of heavily subsidized bread, vital for the population.

USDA Grain Reports

The USDA’s recent reports have been positive for grains, especially spring wheat, which saw only a minor production drop. However, ending stocks for corn were lower than expected, which may support corn prices and nearby wheat values as well.

Healthcare Workers Monitoring Bird Flu in Missouri

Several healthcare workers who came in contact with a bird flu patient in Missouri have shown mild symptoms, though no virus has been confirmed. Investigation into this situation is ongoing, but there is no current evidence of spreading among people.

High Calf Prices Affecting Herd Sizes in Canada

Despite high cattle prices, many producers are leaving the beef industry, resulting in a shrinking cattle herd in Western Canada. Many older producers are selling their herds rather than rebuilding them.

Canadian Diesel Prices Rise Again

Canadian diesel prices have increased for the second week in a row, reaching nearly 98.3 cents per litre, making it one of the highest prices in recent years.

Changing Consumer Habits

Conagra’s recent quarterly results missed expectations, as consumers have shifted their spending towards cheaper products, impacting sales of their higher-priced items.

Support for Striking Dockworkers

The Biden administration is encouraging improved offers to dockworkers who are currently on strike, affecting shipping across many U.S. ports.

Ukrainian Grain Exports Decline

Ukrainian grain exports fell significantly in September due to farmers holding onto their crops, leading to decreased shipments.

H5N1 Bird Flu Outbreaks in Hungary and Italy

Hungary and Italy have reported new outbreaks of H5N1 avian influenza, marking a return of the virus in those areas.

Hurricane Helene Impact

Hurricane Helene has caused significant destruction across the southeastern U.S., resulting in flooding and hindering agricultural harvests in affected areas.

Crop Reports from Manitoba, Saskatchewan, and Alberta

Harvest progress is good across Canada, with Manitoba nearly complete, Saskatchewan at 91%, and Alberta at 74%. Warm, dry conditions have aided the harvest across these provinces.

Grain Exports Statistics

Canadian grain exports have slightly decreased recently, with canola leading the way. Wheat exports have remained strong as well.

Australian Wheat Production Estimates Lowered

Analysts expect a significant reduction in Australian wheat production due to dry weather and frost damage affecting yield estimates.

U.S. Export Sales Update

U.S. wheat and corn export sales have surged over the past week, supporting prices for those commodities.

Oilseed Market Rally

Oilseed prices have increased, particularly soybeans and canola, supported by favorable market conditions.

Have Markets Overlooked Risk?

Recently, commodity markets have stripped away political risk premiums, leading to reactions in the oil market after recent missile attacks in the Middle East. There is a growing sense that markets have become complacent about geopolitical tensions, particularly regarding wheat and oil prices, despite ongoing conflicts in important producing regions. This situation reveals potential for sudden shifts in market behavior based on new developments.