Grain and oilseed markets globally remain extremely tight, with stock levels relative to use having fallen to the lowest levels in 10 years, fuelled further by considerable uncertainty about the escalating tensions between Russia and Ukraine, both major exporters of grains and oilseeds, commented the CRM Agri team, who are based in the UK.
South American soybean yields remain a concern, a resumption in a bullish meal market will need to be watched, they noted.
Agroconsult become the latest agency, after CONAB, to lower Brazilian soybean production to 125.8Mt, with six-year low yields.
As South America continues to endure a La Niña-induced drought, local agencies are foreasting light rain showers for Argentina's farm belt this weekend; they are expected to get heavier as the week progresses, with the impact of that precipitation on soy and corn development to be seen.
Meanwhile, this week saw Black Sea research firm, SovEcon, raise its forecast for the 2022 Russia wheat crop by 3.6Mt to 84.8Mt. “With good weather conditions in Russia and across Europe, confidence remains high for next season, although the harvest is still a long way off,” commented the CRM Agri analysts.
US ag commodity export data
On top of those developments came the latest USDA sales and export data.
US weekly net wheat sales have continued to be minimal at 118Kt, and although up 39% from last week, they were down 61% from the previous four-week average, reported CRM Agri.
However, US wheat exports reached 411.6Mt, up 9% above the previous four-week average, according to those UK analysts' review of the data.
“Central US states continue to look dry on near-term forecasts, this will continue to be a factor to watch over the coming months, alongside crop conditions.”
Reports of record corn sales fail to materialize
Overall, it was not the most exciting week of corn sales, given the multiple social media ‘reports’ for potential large sales, remarked the CRM Agri team.
“After multiple reports of potential Chinese corn sales, these have failed to materialise, with Japan accounting for 600Kt.”
US corn exports however were more encouraging at 1.6Mt, a marketing-year high, with 477Kt to Mexico and 414Kt to China, they said.
Looking at the data on US soybean movement, weekly sales were down 15% from last week, but still up 26% from the previous four weeks: “At this rate, they are rapidly approaching full season targets.”
US soybean exports of 1.2Mt, again down on recent averages, were still encouraging, with 575Kt to China, said the UK analysts.