Some Commodities Have Now Wiped Out All of Their 2021 Rally

Wheat prices overnight are up 15 1/4 in SRW, up 16 in HRW, up 14 3/4 in HRS; Corn is up 15 3/4; Soybeans up 39; Soymeal up $0.28; Soyoil up 2.78.

For the week so far wheat prices are down 27 1/2 in SRW, down 35 in HRW, down 1/4 in HRS; Corn is down 61; Soybeans down 146 3/4; Soymeal down $2.33; Soyoil down 8.60.

For the month to date wheat prices are down 9 in SRW, down 10 1/4 in HRW, up 37 1/2 in HRS; Corn is up 2 3/4; Soybeans down 81; Soymeal down $21.30; Soyoil down 3.68.

Chinese Ag futures (SEP 21) Soybeans down 28 yuan ; Soymeal down 79; Soyoil down 202; Palm oil down 148; Corn down 53 — Malasyian Palm is up 69. Malaysian palm oil prices overnight were up 69 ringgit (+2.04%) at 3446 but remains headed for a weekly slump, with expectations of record output in top grower Indonesia and a plunge in global crop prices on better weather across America’s farmlands prompting investors to flee the market.

Midwest corn, soybean and winter wheat forecasts: West: Isolated to scattered showers Thursday, south Friday-Saturday. Scattered showers Sunday-Monday. Temperatures above normal through Saturday, near to above normal Sunday, near to below normal Monday. East: Scattered showers Thursday night-Monday. Temperatures near to above normal Thursday, above normal Friday-Sunday, near to above normal Monday. 6 to 10 day outlook: Scattered showers Tuesday. Mostly dry Wednesday. Scattered showers Thursday-Saturday. Temperatures below normal Tuesday-Wednesday, near to below normal Thursday-Friday, near to above normal Saturday.

The player sheet for 6/17 had funds: net sellers of 15,000 contracts of  SRW wheat, sellers of 30,000 corn, sellers of 30,000 soybeans, sellers of 12,000 soymeal, and  sellers of 15,000 soyoil.

Preliminary changes in futures Open Interest as of June 17 were: SRW Wheat down 10,810 contracts, HRW Wheat up 3,142, Corn down 20,369, Soybeans down 12,050, Soymeal down 1,592, Soyoil down 6,209.

There were no changes in registrations. Registration total: 20 SRW Wheat contracts; 16 Oats; 0 Corn; 13 Soybeans; 868 Soyoil; 442 Soymeal; 1,249 HRW Wheat.


  • SOYMEAL SALE: The U.S. Department of Agriculture reported private sales of 135,000 tonnes of U.S. soymeal to the Philippines for shipment in the 2020/21 marketing year.
  • WHEAT SALE: Japan’s Ministry of Agriculture on Thursday bought 207,472 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender.
  • WHEAT TENDER: Turkey’s state grain board TMO has issued an international tender to purchase a total of about 395,000 tonnes of red milling wheat.
  • WHEAT TENDER: Importers in the Philippines are believed to have bought about 150,000 tonnes of wheat in a tender this week.


  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat.
  • WHEAT TENDER: Importers in the Philippines are tendering to purchase a total of around 205,000 tonnes of milling wheat and animal feed wheat.
  • WHEAT TENDER: Iranian state agency the Government Trading Corporation (GTC) has issued an international tender to purchase about 60,000 tonnes of milling wheat.
  • WHEAT TENDER: Jordan’s state grain buyer issued international tenders to buy a total 120,000 tonnes of milling wheat which can be sourced from optional origins
  • WHEAT TENDER: South Korea’s Feed Leaders Committee (FLC) has issued a tender to purchase 52,000 to 69,000 tonnes of corn sourced from optional worldwide origins.

 China’s Corn Imports Jumped Fivefold in May to a Record

  • Purchases largely from the U.S. to meet trade deal pledges
  • Pork imports fell to lowest in 3 months as local prices dropBy Bloomberg News

China, the world’s top consumer of corn after the U.S., raised its purchases of the feed grain by nearly 400% in May compared to a year ago, driven by robust demand from a recovering hog herd and the need to replenish state stockpiles.

Imports in May hit 3.16 million tons, bringing the total over the first five months of the year to 11.7 million tons, an increase of over 300%, according to customs data Friday. China bought largely from the U.S. to meet its commitments under the trade deal signed with Washington last year.

However, pork imports by the world’s top consumer fell to their lowest since February. Domestic prices have dropped to near a two-year low as China rebuilds its herd following the outbreak of African swine fever.

Sinograin Sells All Ukrainian Corn on Offer at Reserves Tender

China’s state grains stockpiler Sinograin has sold all the 37,126 tons of Ukrainian corn offered from inventories at auction on Friday, the company said in a statement.

Planalytics Raises U.S. Soybean Forecast to 50.10 Bu/Acre

Outlook for this year’s crop yield is up from previous forecast of 49.90 bu/acre, according to data issued by Planalytics on Thursday.

Yield in key states versus previous Planalytics forecast (in bu/acre):

  • Iowa 56.10 vs 56.10
  • Illinois 58.90 vs 58.30
  • Indiana 56.00 vs 55.50

 Planalytics Raises U.S. Corn Forecast to 174.90 Bu/Acre

Outlook for this year’s crop yield is up from previous forecast of 174.30 bu/acre, according to data issued by Planalytics on Thursday.

Yield in key states versus previous Planalytics forecast (in bu/acre):

  • Iowa 193.70 vs 193.70
  • Illinois 194.70 vs 193.00
  • Indiana 181.20 vs 179.20

Planalytics Raises U.S. Winter Wheat Forecast to 52.70 Bu/Acre

Outlook for this year’s crop yield is up from previous forecast of 52.40 bu/acre, and has risen for a third consecutive time, according to data issued by Planalytics on Thursday.

Yield in key states versus previous Planalytics forecast (in bu/acre):

  • Kansas 51.10 vs 49.80
  • Oklahoma 38.90 vs 38.50

Planalytics Lowers U.S. Spring Wheat Forecast to 45.70 Bu/Acre

Outlook for this year’s crop yield is down from previous forecast of 45.90 bu/acre, according to data issued by Planalytics on Thursday.

Yield in key states versus previous Planalytics forecast (in bu/acre):

  • North Dakota 44.50 vs 45.20
  • Minnesota 62.00 vs 61.80
  • Montana 33.10 vs 32.60

U.S. Barge Shipments of Grain Fell 27% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending June 12 from the previous week, according to the USDA’s weekly grain transportation report.

U.S. Corn Crops in Drought Area Rise to 41% From 35%: USDA

  • Corn area experiencing moderate to intense drought rose by 6 percentage points in the week
  • Soybean area up to 36% vs 31%
  • Spring wheat area reached its highest point of the year with 86% in drought

Oilseed Meal Shipments From India Tumble 25% M/m in May: Group

Oilseed meal exports fell to 228,242 tons in May from 303,458 tons a month earlier, the Solvent Extractors’ Association of India said in an emailed statement Friday.

  • NOTE: Exports totaled 248,007 tons in May 2020
  • Soybean meal exports 52,434 tons in May vs 39,705 tons a month earlier
  • Rapeseed meal shipments 96,870 tons vs 177,822 tons
  • Rice bran extract sales 58,106 tons vs 58,022 tons
  • Castor seed meal exports 20,832 tons vs 27,909 tons

Rainfall Improves Saskatchewan Soil But Floods Some Crop Areas

Heavy localized rainfall improved topsoil conditions in the Canadian Prairie province, but caused water to pool in some fields, the Saskatchewan government said Thursday.

French wheat crop rating unchanged at 81% good/excellent

An estimated 81% of the French soft wheat crop was in good or excellent condition in the week to June 14, unchanged from the previous week, farm office FranceAgriMer said on Friday. That compared with a score of 56% at the same point last year, it said in a cereal crop report.

France’s Rouen Grain Exports Drop 91% in Week to June 16: Port

Grain shipments from France’s Rouen port totaled 7,500 tons, compared with 87,986 tons a week earlier, according to an emailed report.

Argentine Soy, Corn, Wheat Estimates June 17: Exchange (Table)

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2020-21 corn and soybean production estimates unchanged from last week
  • Corn harvest 42.3% complete vs 37.8%

Argentina Port, Grain Terminal Workers to Hold 24-Hour Strike

Port and grain terminal workers in Argentina will hold a 24-hour strike on Friday to demand Covid-19 vaccines, according to a statement issued by the IMPACI umbrella group.

Members of maritime, grain handling, port and cargo unions will stop working at midnight and may step up protests if the action doesn’t prompt an adequate response from authorities

Brazil regulation seen allowing more U.S. GMO crop imports

Brazil’s government published a new regulation on Thursday to align rules for genetically modified (GMO) crops with global standards, a move the agriculture lobby says will make it easier to import more GMO soy and corn from the United States.

Under the new rules, published by Brazilian biosecurity regulator CTNBio in the official government gazette, crops with different genetic modifications can be transported in the same ship, provided each modification is already approved, industry group CropLife said.

Stronger Brazil Currency Threatens Meat Export Margins: Itau BBA

The Brazilian meat industry’s profit margins — already squeezed in the domestic market due to high cattle and corn prices — may also be hurt as further gains in the real affect export profitability, Cesar de Castro Alves, agribusiness consultant at Itau BBA, says in bank webinar.

  • Industry may be forced to buy soybeans, corn at high levels and sell the final product ahead at lower prices for export due to the stronger real
  • Negative effect can be eased if export prices rise in dollars
  • Gains of Brazilian currency also threat soybeans, corn producers as they have bought seeds, chemicals at an exchange rate around 5.40 reais/dollar while current levels are at 5 reais, Pedro Fernandes, agribusiness director at Itau BBA, says in webinar
  • Itau BBA sees increasing agribusiness funding in Brazil by more than 20% y/y to as much as 49 billion reais in 2021-22: Fernandes
    • Bank’s agricultural trading starts operating by August to take opportunities in sector value chain without being a competitor of its clients

Russia Raises Wheat Export Tax to $38.10/Ton for Next Week

Russia’s wheat export customs duty will rise to $38.10/ton from $33.30/ton currently, the Agriculture Ministry said Friday on its website.

  • NOTE: The rates are set weekly and take effect three working days after publication

Some Commodities Have Now Wiped Out All of Their 2021 Rally

  • Markets eke out small gain on Friday after substantial losses
  • Raw materials roiled by Fed’s taper talk to better weather

For all the talk of a commodities boom, some markets have now wiped out gains for the year and several more are close to doing so.

Soybean futures have erased their 2021 advance, sliding more than 20% from an eight-year high reached in May, while corn and wheat have also tumbled. The Bloomberg Grains Spot Subindex slid the most since 2009 on Thursday, before edging higher on Friday as markets recovered some losses. Other commodities that have seen their big rallies evaporate include platinum, while once-surging nickel, sugar and even lumber have faltered.

The fact that some markets are falling while others — including crude oil and tin — are holding gains underscores how unevenly the complex is responding to economies reopening and expanding once again. While those materials have climbed on strong demand fundamentals, others face their own unique headwinds, such as an easing supply worries in soybeans and monetary policy uncertainty in the case of gold and silver.

Even some of the markets that are clearly benefiting from the reopening are seeing a pullback, with copper heading for its worst week in more than a year. A big backwardation in many commodities and seasonality accounts for some of the recent slump as futures contracts roll over, while improving weather is hurting prices of many agricultural products.

Five Takeaways From the Commodity Rout

Commodities had an ugly Thursday after the Fed’s hawkish shift midweek. At this juncture, there are five immediate takeaways that will shape how the asset class performs into month-end and onward in 3Q.

  • The follow through pain for raw materials hinges in large part on whether the dollar retains its upward bias. Thursday marked its best run of gains since March 2020. A further rise seems probable.
  • The stumble came close to the end of 2Q, and will feed into investors’ decision-making about allocations for the 2H. That period seems a far less welcoming one for commodities.
  • While Thursday was painful, that pain was not felt evenly across the varied clan. Brent, for example, lost 1.8%, but copper shed twice as much. The difference reflects their underlying near-term fundamentals, which favor crude over the metal. Investors may now become more discerning between raw materials.
  • This week’s price action was driven in the main by Powell & Co., but it bears remembering that China, with its campaign to bat back raw material prices, was a secondary actor. That thrust is likely to be sustained over the coming months.
  • Lastly, some of the enthusiasm driving commodity gains in recent quarters was keyed off long-term themes, especially the energy transition and large-scale infrastructure investment. These remain alive.

Supreme Court Backs Nestle, Cargill on Child-Slavery Suit

  • Justices say suit from Mali residents lacked U.S. connection
  • Case gives companies a broader shield from overseas victims

The U.S. Supreme Court gave companies a broader shield against lawsuits by victims of overseas atrocities, rejecting accusations that Nestle SA’s U.S. unit and Cargill Inc. were complicit in the use of child slavery on Ivory Coast cocoa farms.

The justices said the allegations against the companies lacked enough of a U.S. connection to go forward under the 1789 Alien Tort Statute.

The court stopped short of exempting corporations from liability under the law altogether. But lawyers on both sides of the dispute agree that the ruling makes it more difficult to sue.

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