Markets

Daily Market Wire 3 November 2022

Lachstock Consulting, November 3, 2022

French and US wheat markets fell 4-6pc on Black Sea Grain Initiative news.

  • Chicago wheat December contract down US56.5 cents per bushel to 846c/bu;
  • Kansas wheat December contract down 49.75c/bu at 940.25c/bu;
  • Minneapolis wheat December contract down 40.5c/bu to 949.25c/bu;
  • MATIF wheat December contract down €16.50/t to €341.25/t;
  • Black Sea wheat December contract down US$5.50/t to $319/t;
  • Corn December contract down 10.25c/bu to 687.5c/bu;
  • Soybeans March 2023 contract up 7.25c/bu to 1461.5c/bu;
  • Winnipeg canola March 2023 contract was up C$11/t to $897.10/t;
  • MATIF rapeseed February 2023 contract down €8.75/t to  €662.25/t;
  • ASX Jan 2023 wheat contract  up $A1/t to $504/t ;
  • ASX Jan 2023 barley contract unchanged A$350/t;
  • AUD dollar weaker at US$0.635.

International

The export deal is back on. Russia announced it will resume participation in the Black Sea Grain Initiative after receiving written guarantees from Kyiv not to use the corridor for military operations against Russia. “The Russian Federation considers that the guarantees received at the moment appear sufficient, and resumes the implementation of the agreement,” the Russian ministry statement said.

President Putin said on Wednesday Russia reserved the right to withdraw from the grain accord if Ukraine violated its guarantees. But in a nod to Turkey’s influence, as well as what he called its “neutrality”, he said if Moscow did pull out, it would not impede grain supplies from Ukraine to Turkey.
Markets essentially are back to where they were last week, with uncertainty about the continuation of the export corridor after November. It is believed that President Putin is likely to use the need for an extension as a way to gain leverage at the November G20 summit in Indonesia. 

Russia’s Ag Ministry reports that as at 31 Oct, the 2022-23 wheat harvest had yielded 104.7Mt from 29.1Mha (equivalent to 99% of planted area), with productivity at 3.6t/ha, barley 24.3Mt from 7.8Mha (99% of area), with yields at 3.1t/ha and rapeseed 4.6Mt, from 2.2Mha (94% of area), with productivity at 2.1t/ha. Russia’s Union of Grain Exporters reports that as at early Nov, ytd 2022-23 (Jul/Jun) grain exports totalled 18Mt (-2% on same period previous year), including wheat at 15Mt (-4%). 
 StoneX Brazil raised its 2022-23 soybean production estimate from 153.8Mt to 154.35Mt (compared to 127.2Mt last season).
 The main access road to the Brazilian port of Paranaguá was blocked by protesters yesterday, following the election loss of current President Bolsonaro.
 Argentina will reportedly soon allow wheat exporters to reschedule shipments without the normal 15 per cent penalty, due to the impact the drought is having on production. Producers have already formally declared export sales of 8.89Mt for the 2022-23 wheat crop, with an existing export cap set at 10Mt.

Australia

Local markets firmed yesterday across the board, however it is hard to gauge grower reaction to higher bids because they remain at a standstill with so much uncertainty. There is more certainty in WA and in the northern part of the east coast where headers are rolling but the feedback on quality has been mixed with classifying anywhere in the range from H2 to SFW1. There are reports of wheat issues with falling numbers and presence of fusarium.
CBH Group announced plans to spend $4 billion over the next 10 years on the co-operative’s network grain receival, storage and outloading infrastructure and assets. Network investment projects for 2023 include spending on site expansion, storage refurbishment, temporary storage, accommodation, throughput enhancement, receival equipment upgrade and rapid rail outload. 

Although the rain has stopped for now, moderate to major flood warnings are still in place for many catchments across New South Wales, Victoria and Southern Queensland.
According to the Bureau of Meteorology records were broken in SA, Vic, NSW and Qld. Nationally 180 stations with at least 30 years of observations set records for the highest total rainfall for October, and around 30 of those were highest for any month of the year.

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