USDA

The Commodities Feed: Copper spread tightens on inventory withdrawals Oil prices are trading under pressure this morning on demand side uncertainties as Saudi Arabia increased the official selling price for July deliveries for all regions. LME copper continues to see inventory withdrawals as demand in Asia picks up.   Energy – Saudi increases the official selling price for oil Saudi Arabia increased its official selling price for all regions for July, a day after the nation pledged an additional oil supply cut for the same month. Saudi Aramco will sell the Arab Light crude for buyers in Asia at a US$3/bbl premium for July deliveries, an increase of US¢45/bbl compared to June 2023.The premium for the US and European deliveries has increased by US¢90/bbl, while buyers in the Mediterranean region will see an increase of US¢60/bbl. The hike in premium comes as a surprise considering ongoing demand concerns and that Saudi Arabia has been pushing for supply cuts to bring the oil market into balance.   Metals – Declining copper on-warrant stocks tighten LME spread Recent LME data shows that total on-warrant stocks for copper dropped by 17,750 tonnes – the biggest daily decline since October 2021 – for a second consecutive session to 71,575 tonnes (the lowest level in almost a month) as of yesterday. The majority of the outflows were reported from South Korea’s Busan warehouses. Meanwhile, cancelled warrants for copper rose by 18,025 tonnes after declining for three consecutive sessions to 27,375 tonnes yesterday, signalling potential further outflows. The cash/3m for copper stood at a contango of just US$4/t as of yesterday – compared to YTD highs of a contango of US$66.26/t from 23 May – indicating supply tightness in the physical market.   In mine supply, Peru’s latest official numbers show that copper output in the country rose 30.5% year-on-year (+1.2% month-on-month) to 222kt in April. The majority of the annual production gains came from the higher output levels from mines like Southern Peru Copper, the Las Bambas and Cerro. Cumulatively, copper production grew 15.7% YoY to 837.5kt in the first four months of the year. Among other metals, zinc production in the nation increased 31.4% YoY to 130.6kt in April.   In ferrous metals, the most active contract of iron ore trading at the Singapore Exchange extended its upward rally for a fifth consecutive session and traded above US$108/t this morning on speculations of more supportive steps from China to accelerate its economic growth. The recent market reports suggest that the People’s Bank of China is likely to cut the reserve-requirement ratio for banks and might also lower interest rates in the second half of the year. Meanwhile, BBG also reported that the Chinese government is preparing a new batch of measures to push growth in the property market.     Agriculture – US crop planting maintains the pace The USDA’s latest crop progress report shows that US corn plantings continue to rise with 96% of plantings completed as on 4 June, compared to 93% of planting done at this point in the season last year and the 5-year average of 91%. Similarly, soybean plantings are also growing, with 91% planted as of 4 June – well above the 76% seen at the same stage last year and the 5-year average of 76%. Meanwhile, spring wheat plantings are 93% complete. This is above the 81% planted at the same stage last season and in line with the 5-year average. Meanwhile, the agency rated around 36% of the winter wheat crop in good-to-excellent condition, up from 34% a week ago and 30% seen last year.   The USDA’s weekly export inspection data for the week ending 1 June indicated a drop in demand for US grains over last week. The agency stated that US corn export inspections stood at 1,181kt, lower from 1,346.4kt in the previous week and 1,458.5kt reported a year ago. For wheat, export inspections stood at 291.6kt, down from 391.3kt from the previous week and 355.3kt reported a year ago. Similarly, soybean export inspections fell to 214.2kt, compared to 243.1kt from a week ago and 370kt from a year ago.   The director general of the Ivory Coast's cocoa regulator, Conseil Café Cacao, stated that the domestic cocoa crop is expected to improve in 2022-23 (compared to the previous year) despite intensifying concerns about a potential outbreak of the swollen shoot virus. Ivory Coast cocoa production is stabilizing despite a slow start, taking the season's harvest projections between 2mt-2.2mt. Last week, the International Cocoa Organization (ICCO) projected an increase of 4% in Ivory Coast's cocoa output this season, reaching 2.20mt.

Metals – Share of Russian aluminium in LME warehouses grows Industrial metals (except for nickel) edged higher in the morning session as China trimmed its short-term policy interest rate unexpectedly. The People’s Bank of China lowered its 7-day reverse repurchase rate by 10bps to 1.9% in a sign that Beijing has been taking measures to support flagging economic growth. The move also provides some confidence to the market that China could take further steps to push up economic growth.   Recent data from LME shows that the share of Russian aluminium inventory out of total exchange inventory increased to 68% in May from 52% in April following increased withdrawals of aluminium from LME warehouses in Asia. The data shows that there was a total of 263,125 tonnes of Russian aluminium in exchange warehouses, while Indian-origin aluminium stood at 116,800 tonnes falling from 46.5% in April to 30% in May. Meanwhile, the exchange said that 19% of the 167,550 tonnes of aluminium requested for delivery in May was still Russian metal.   Agriculture – USDA slashes weekly corn crop ratings on dry weather The United States Department of Agriculture's (USDA’s) latest crop progress report shows that US soybean plantings continue to rise with 96% planted as of 11 June, well above the 87% seen at the same stage last year and above the five-year average of 86%.     Similarly, spring wheat plantings are 97% complete, which is above the 92% planted at the same stage last season, and in line with the five-year average. On the crop condition, the agency rated around 38% of the winter wheat crop in good-to-excellent condition, up from 36% a week ago, and 31% seen last year. On the other hand, the USDA rated 61% of the corn crop in good-to-excellent condition as of 11 June, lower from 64% a week ago and 72% seen at the same stage last year, largely on account of dry weather.   The USDA’s weekly export inspection data for the week ending 8 June pointed towards weakening demand for US grains. USDA’s export inspections of corn stood at 1,169.1kt in the abovementioned period, lower than the 1,206.8kt in the previous week and 1,221.8kt reported a year ago. For wheat, US export inspections stood at 246.6kt, down from 304.4kt from a week ago and 411.9kt reported a year ago. Meanwhile, US soybean export inspections fell to 140.2kt compared to 222.3kt from a week ago and 609kt from a year ago.

Agriculture – USDA slashes corn and soybean crop ratings The USDA’s latest crop progress report shows that the USDA trimmed its crop condition ratings for US corn and soybean following dry weather conditions. The USDA rated 55% of the corn crop in good-to-excellent condition as of 18 June, lower than 61% a week ago and 70% seen at the same stage last year. Similarly, the agency rated 54% of the soybean crop in good-to-excellent condition, lower than 59% a week ago and 68% seen at the same stage last year. On the other hand, the USDA rated around 38% of the winter wheat crop in good-to-excellent condition, unchanged from a week ago, and up from 30% seen last year. Weekly data from the European Commission show that soft wheat shipments from the EU reached 30.4mt for the season as of 18 June, up 11% YoY. Morocco, Algeria, and Nigeria were the top destinations for these shipments. Meanwhile, EU corn imports stood at 25.3mt, compared to 16.1mt reported a year ago.

Agriculture – US corn and soybean concerns The United States Department of Agriculture's (USDA’s) latest crop progress report continues to highlight concerns for the US corn and soybean crop, given current dry weather conditions. The USDA rated 50% of the corn crop in good-to-excellent condition over the last reporting week, lower than 55% a week ago and 67% seen at the same stage last year. In fact, the rating for the corn crop is the lowest seen for this time of year since 1988, whilst it is a similar story for soybeans, with 51% of the soybean crop rated good-to-excellent condition, down from 54% a week ago and 65% seen at the same stage last year. These poor crop conditions will leave speculative shorts nervous as we move through the growing season, and this is the reason why we have already seen some large amounts of short covering. Meanwhile, for winter wheat, an improvement was seen in crop conditions with 40% of the crop in good-to-excellent condition, up from 38% seen a week ago. Ukraine’s Agriculture Ministry reported that Ukrainian grain exports remained almost unchanged from the previous year and stood at 48.4mt for 2022/23 as of 26 June with the current season nearing its end. These shipments include 16.6mt of wheat (down 11% year-on-year) and 28.8mt of corn (up 23% YoY). In a separate data release, the EU’s Monitoring Agricultural Resources unit projects Russia’s wheat harvest to fall 17% YoY to 86.7mt for 2023, as mixed weather conditions continue to hurt the wheat crop.

Metals – Zinc and lead on-warrant stocks climb Recent LME data shows that total on-warrant stocks for lead increased by 1,075 tonnes to 41,225 tonnes as of yesterday, the highest since February 2022. The majority of the additions came from the warehouses in Port Klang, Malaysia. As for zinc, on-warrant stocks rose by 2,625 tonnes to 68,350 tonnes.     Agriculture – IGC lowers corn output estimates In its latest monthly update, the International Grains Council (IGC) lowered its 2023/24 global corn output forecasts from 1,217mt to 1,211mt, while consumption projections were reduced to 1,205mt from a previous forecast of 1,211mt. Weaker consumption means that global corn ending stocks are expected to increase from 272mt to 276mt. For wheat, the council revised its global ending stock estimates down from 271mt to 264mt, despite a slight increase in output forecasts. The reduction in stocks was driven by expectations of stronger demand.   The USDA’s weekly net export sales for the week ending 22 June showed strong demand for US corn and wheat, while soybean shipments dropped over the previous week. US corn shipments surged to 263.9kt, compared to the 83.1kt reported in the previous week and 208.1kt from a year ago. Similarly, wheat exports rose to 155.2kt, higher than the 123.9kt reported a week ago but lower in comparison to 496.7kt from a year ago. Finally, soybean shipments stood at 244.4kt, lower than the 626.3kt reported a week ago.

Agriculture–USDA sees soybean acreage falling In its latest Prospective Plantings report, the USDA estimates soybean plantings will drop significantly while corn acreage will rise this year. The agency projects 2023 soybean acreage at 83.5m acres, significantly lower than the March estimate of 87.5m acres and the market expectation of 87.7m acres. The US planted 87.5m acres of soybeans in 2022. In contrast, the USDA projects 2023 corn plantings to reach 94.1m acres (the highest since 2013), which is higher than the March estimate of 92m acres and the 88.6m acres planted in 2022. The market was expecting a number closer to 91.9m acres. Wheat planting estimates were trimmed to 49.6m acres, which was in line with expectations, and down from the 49.9m acres projected in March but higher than the 45.7m acres planted in 2022. CBOT futures were quick to react to the unexpected numbers with CBOT soybeans settling more than 6% higher on Friday, whilst CBOT corn settled more than 6% down on the day. The USDA also released its quarterly stocks report (as of 1 June) last week, which showed a drop in US grain inventories. The agency reported corn inventories at 4.11bn bushels, down 6% YoY and lower than the market expectation of around 4.25bn bushels. For soybeans, the agency reported inventories of 796m bushels, down 18% YoY and below market expectations of around 805m bushels. Similarly, wheat inventories were reported at 580m bushels, down 17% YoY and lower than the 613m bushels the market was expecting. The latest CFTC data shows that money managers reduced their net bearish bets in CBOT wheat by 31,966 lots to 52,168 lots as of 27 June, the lowest in seven months. The move was predominantly driven by a 33,030 lot reduction in the gross short position. Speculators cut their net long position in CBOT corn by 5,454 lots to 52,845 lots over the last reporting week. Meanwhile, speculators increased their net long in CBOT soybeans by 22,530 lots to 99,480 lots as of last Tuesday. Given the price action last Friday, it is likely the next positioning report will show a further boost in the soybean net long and a further reduction in the corn net long.

Agriculture: Bearish WASDE report The USDA’s latest WASDE report was a largely bearish affair, particularly for corn and soybeans. The USDA revised up its US corn production estimate by 55m bushels to 15.32bn bushels, on the back of a larger than expected planted area as reported in its recent acreage report. A reduction in yield estimates (due to recent dry weather) was not enough to offset the higher acreage. The market was expecting a larger fall in yields, therefore the USDA’s production estimate was above the 15.15b bushels the market was expecting. Higher output sees US ending stock estimates for 2023/24 at 2,262m bushels, up slightly from the previous forecast and above the 2,166m bushels the market was expecting. For the global balance, corn production for 2023/24 is forecast to increase by 1.7mt to 1,224.5mt, as output increases from Canada (+0.7mt) and Ukraine (+0.5mt) partially offset by reductions from the EU (-0.9mt). 2023/24 global ending stocks for corn were left largely unchanged at 314.1mt, although this was above the little more than 312mt the market was expecting. The USDA lowered 2023/24 US soybean output estimates by 210m bushels to 4,300m bushels due to lower acreage. The market was expecting further downside to soybean output, however, the agency left yields unchanged from last month. US 2023/24 ending stock estimates were reduced from 350m bushels to 300m bushels, which was still well above the roughly 206m bushels the market was expecting. For the global market, 2023/24 soybean production estimates were lowered by 5.4mt to 405.3mt, which leaves ending stocks for 2023/24 at just under 121mt.   Lastly, the USDA projects US wheat supplies to increase by 74m bushels to 1,739m bushels. This pushes US ending stock estimates up by 30m bushels to 592m bushels, which is above the roughly 565m bushels the market was expecting. For the global wheat market, the USDA expects 2023/24 wheat production to fall to 796.7mt this season, down from an earlier estimate of 800.2mt. As a result, ending stocks for 2023/24 were lowered by 4.2mt to 266.5mt, which is less than the market was expecting.

US soybean cuts, but not enough The USDA slashed its US soybean production estimates by 210m bushels to 4,300m bushels due to lower acreage. Again, this was expected, given the USDA’s recent acreage report, which highlighted a reduction in US soybean area. However, production estimates still came in above market expectations of 4,276m bushels. The reason behind this difference is the fact that the USDA decided to leave soybean yield estimates unchanged, despite the relatively poor condition of the domestic crop. Expectations for a lower crop mean that 2023/24 US ending stocks were lowered from 350m bushels to 300m bushels. However, this is still well above the roughly 206m bushels the market was expecting. So, it should be no surprise that CBOT soybeans settled almost 2.4% lower yesterday. There were relatively small changes in the global soybean balance. The USDA reduced global soybean production estimates by 5.4mt to 405.3mt. However, this was driven by the US. Global ending stocks for 2023/24 were cut from 123.3mt to 121mt, which was broadly in line with market expectations.   Soybean supply/demand balance    

Agriculture: USDA slashes corn and soybean crop ratings CBOT corn extended losses for a fifth consecutive session yesterday on the prospect of improving weather conditions in the Northern Hemisphere, with the hot and dry weather conditions coming to an end this week, although adverse weather over the preceding few weeks has continued to hurt the current crop. The USDA’s latest weekly crop progress report rated 55% of the corn crop to be in good-to-excellent condition, compared to 57% last week and 61% reported last year; the market was expecting 56% of the crop to be rated in good-to-excellent condition. Meanwhile, the agency rated 52% of the soybean crop as good-to-excellent, lower than 54% from a week ago and 60% reported a year ago. The market was expecting a number closer to 53%. For wheat, the USDA data showed that 80% of the winter wheat crop was harvested as of 30 July, compared to 68% from a week ago and 81% at the same stage last season. The market was expecting the harvest to reach 78%. The USDA’s weekly export inspection data for the week ending 27 July pointed towards improving demand for US grains. The USDA’s export inspections of corn stood at 522.9kt in the above-mentioned period, higher from 329.8kt in the previous week but lower in comparison to the 905.3kt reported a year ago. Similarly, US soybean export inspections stood at 329.5kt, higher compared to 288.5kt from a week ago but lower than the 595kt from a year ago. For wheat, US export inspections stood at 581.3kt, up from 361.1kt from a week ago and 282.1kt reported a year ago.

Agriculture: US crop ratings start to improve The USDA’s latest weekly crop progress report rated 57% of the corn crop to be in a good-to-excellent condition as of 6 August, compared to 55% last week and 58% reported last year; the market was expecting 56% of the crop to be rated in good-to-excellent condition. As for soybeans, the agency rated 54% of the crop as good-to-excellent, higher than 52% from a week ago. However, that's lower than the 59% reported a year ago. It was in line with the average market expectations of 54%. For wheat, the USDA data showed that 87% of the winter wheat crop was harvested as of 6 August, compared to 80% from a week ago and 85% at the same stage last season. The market was expecting the harvest to reach 88%. Trade data from the Chinese Customs released this morning show that China’s soybean imports rose 23.4% YoY to 9.7mt in July as domestic crushers ramped up the purchases to take advantage of higher supplies by Brazil. Cumulative imports rose 15% YoY to 62.3mt over the first seven months of the year. The USDA’s weekly export inspection data for the week ending 03 August shows weakening demand for US grains. The USDA’s export inspections of corn stood at 377kt in the above-mentioned period, lower from 538kt in the previous week and 556kt reported a year ago. Similarly, US soybean export inspections stood at 282kt, lower compared to 334kt from a week ago and 871kt from a year ago. For wheat, US export inspections fell to 275kt, compared to 585kt from a week ago and 636kt reported a year ago.

Agriculture – US weekly grain inspections remain strong The USDA’s weekly export inspection data for the week ending 7 September shows strong demand for US grains. Export inspections of corn stood at 623.9kt over the week, higher than the 482.8kt in the previous week and 474.4kt reported a year ago. Similarly, US wheat export inspections stood at 406.2kt, up from 318.1kt a week ago, but lower than 757.8kt from a year ago. For soybeans, US export inspections stood at 310.1kt, compared to 406.9kt a week ago and 341.7kt for the same period last year. The latest crop progress report from the USDA shows that 52% of the US corn crop is rated in good to excellent condition, which is down from 53% seen both in the previous week and at the same stage last year. The soybean crop also deteriorated over the week with 52% of the crop rated good to excellent, down from 53% the previous week and also below 56% seen last year. Meanwhile, the spring wheat harvest continues to progress well with the harvest 87% complete, up from 74% a week ago and above the 83% harvested by the same stage last year.

Agriculture – USDA projects larger US corn supplies In its latest WASDE, the USDA estimates 2023/24 US corn production to rise by 23m bushels to 15.134bn bushels as a sizable harvest offsets falling yields. As a result, 2023/24 ending stock estimates were increased by 19m bushels to 2.2bn bushels. For the global balance, 2023/24 ending stock estimates were increased from 311.1mt to 314mt, primarily due to higher beginning stocks and rising supply. For soybeans, the USDA slashed its 2023/24 US production estimate from 4,205m bushels to 4,146m bushels due to falling yields. Lower beginning stocks and output mean that US ending stocks were cut from 245m bushels to 220m bushels. The global soybean balance saw 2023/24 ending stocks lowered marginally from 119.4mt to 119.3mt. Lower US supplies were largely offset by reduced demand. Finally, for wheat, the USDA lowered its global ending stocks estimate by 7mt to 258.6mt for 2023/24. The agency expects 2023/24 global wheat production to slide by 6mt to 787.3mt, due to lower production from Australia (-3mt), Canada (-2mt), Argentina (-1mt) and the EU (-1mt). The USDA left the US wheat balance largely unchanged.

WASDE update: Tighter wheat and looser corn market The USDA’s latest monthly WASDE report was constructive for wheat as adverse weather in Australia, Canada and the EU is expected to tighten global supply. However, the release was more bearish for corn on the back of revisions higher to US acreage and ending stocks.   Higher acreage pushes US corn supply up The USDA revised up its 2023/24 US corn production estimates by 23 million bushels to 15.13 billion bushels, with an increase in acreage offsetting lower yields. This is higher than the roughly 15 billion bushels the market was expecting. Planted acreage estimates were increased by 0.8 million acres to 94.9 million acres, whilst yield estimates were lowered by 1.3bu/acre to 173.8bu/acre. With no changes to demand estimates, 2023/24 ending stocks were increased by 19 million bushels to 2.2 billion bushels. This is higher than the roughly 2.13 billion bushels the market was expecting. Therefore, it was not surprising to see CBOT corn coming under pressure following the release. For the global balance, 2023/24 ending stock estimates were revised up from 311.1mt to 314mt primarily due to higher beginning stocks and expectations for larger US output. The market was expecting a number below 310mt, so again, the USDA’s estimate is a lot more bearish than what the market was expecting. It will also provide some comfort to those who have been concerned over lower export availability from Ukraine since the suspension of the Black Sea Grain deal.   Corn supply/demand balance

Lower yields tighten US soybean market For the US, the USDA slashed its 2023/24 soybean production estimates from 4,205 million bushels to 4,146 million bushels on the back of revisions lower in yields, whilst acreage was largely flat. This lower supply was partly offset by downward revisions in demand with export estimates cut by 35 million bushels, whilst domestic demand estimates were lowered by 10m bushels. As a result, 2023/24 US ending stock estimates were reduced from 245 million bushels to 220 million bushels. However, it was still higher than the roughly 213 million bushels the market was expecting. For the global soybean balance, the USDA revised down 2023/24 global ending stocks marginally from 119.4mt to 119.3mt. The market was expecting a number of a little over 118mt.   Soybean supply/demand balance   Unfavourable weather weighs on wheat supply The global wheat balance continues to tighten, with 2023/24 ending stocks lowered by 7mt to 258.6mt, which is quite some distance below just over 264mt as expected by the market. This tightening was driven by revisions lower in supply with 2023/24 global output cut by 6mt. Lower output is largely driven by Australia (-3mt), Canada (-2mt), Argentina (-1mt) and the EU (-1mt), primarily due to unfavourable weather conditions. These reductions were partly offset by expectations for higher Ukrainian output. The main concern for Ukrainian supply is whether it will all be able to make it onto global markets. For the US market, the agency made no changes to the wheat balance.   Wheat supply/demand balance

Agriculture: EU lowers corn yield estimates In its monthly crop monitoring MARS report, the European Commission estimates that corn yields would drop to 7.26t/ha from a previous projection of 7.45t/ha; this is also below the five-year average of 7.48t/ha. Frequent rains in the larger parts of the northern region and dry conditions across the southern areas continue to impact crop quality and yield expectations. The latest crop progress report from the USDA shows that 51% of the US corn crop is rated in good to excellent condition, which is down from 52% seen in both the previous week and at the same stage last year. The soybean crop condition remained flat over the week, with 52% of the crop rated good to excellent. However, that's down from 55% last year. The spring wheat harvest continues to progress well, with the harvest 93% complete, up from 87% the previous week and in line with the harvest at the same stage last year. Similarly, the report shows that 9% of the corn area was harvested over the week, higher than the 5% reported in the previous week and 7% seen at the same stage last year. The latest data from the Uganda Coffee Development Authority shows that Uganda’s coffee exports rose 14.2% MoM and 48% YoY to a record high of 743,517 bags (60 kg bag) in August, following a healthy harvest in the southwest region. Coffee exports for the season rose 6% YoY to 5.6m bags through until August.

Agriculture – Damage to Ukraine's Odessa port Wheat prices firmed up yesterday on reports that Russia has ‘significantly damaged’ the Odesa port in Ukraine, one of the major ports for grain export. The latest attacks were reported to have damaged port infrastructure, grain storage facilities and warehouses at the ports. Ukraine’s export of grains from the port has largely stopped after Russia pulled out of the export deal. However, recently a few ships were reported to have managed shipments from the port. The latest attacks are likely to stop any residual exports from the port and also lower the possibility of export resumptions from the port in the near term. The USDA’s weekly export inspection data for the week ending 21 September show that US soybean and wheat shipments rose while corn exports slowed over the last week. US weekly inspection of corn exports stood at 661kt, lower than the 676kt over the previous week and up from 550kt reported a year ago. For wheat, export inspections stood at 451kt, up from 423kt last week but lower than the 589kt seen for the same period last year. Soybean export inspections stood at 482kt, higher than 430kt from a week ago and 292kt from a year ago. The USDA’s latest crop progress report shows that 53% of the US corn crop is rated in good to excellent condition, up from 51% in the previous week. Meanwhile, the harvest is progressing well with 15% of the crop harvested, up from 11% at the same stage last year and also above the five-year average of 13%. As for the US soybean crop, 50% of the crop is rated good to excellent, down from 52% the previous week. However, the harvest is progressing well, with 12% of the area harvested, up from just 7% at the same stage last year. It is also higher than the five-year average of 11%. Finally, winter wheat plantings are falling behind last year with 26% of the area planted, down from 30% at the same stage last year and also lower than the five-year average of 29%.

Agriculture - US harvest progress The USDA’s weekly crop progress report for the week ending 29 October shows that 71% of the US corn crop was harvested, down from 74% at the same stage last year. However, it was above the five-year average of 66%. Similarly, 85% of the US soybean area was harvested, down from 87% at the same stage last year, but higher than the five-year average of 78%. Finally, 84% of the winter wheat area has been planted, down from 86% at the same stage last year and slightly lower than the 5-year average of 85%. Weekly export inspection data from the USDA for the week ending 26 October shows that US corn and wheat inspections rose, while soybean exports eased over the last week. Export inspections of corn stood at 531.5kt, up from 449.3kt in the previous week and 445.7kt reported a year ago. Similarly, US wheat export inspections stood at 189.8kt, above 169.5kt a week ago, and also higher than 137.1kt seen last year. For soybeans, US export inspections stood at 1,890.2kt, down from 2,625.7kt a week ago and 2,586.2kt for the same period last year.

Agriculture - Bearish WASDE Grain prices came under pressure yesterday after a fairly bearish WASDE report. In its latest monthly update, the USDA revised up its 2023/24 US corn output estimate by 170m bushels to 15.2bn bushels, due to an upward revision in yields. As a result, 2023/24  ending stock estimates are now seen at 2.16bn bushels, up 45m bushels from last month’s estimate and above market expectations of around 2.14bn bushels. For the global corn balance, 2023/24 ending stock projections were revised up - from 312.4mt to 315mt primarily due to larger supplies and higher beginning stocks. This was above the roughly 312mt the market was expecting. For soybeans, the agency revised up its 2023/24 US soybean production estimates from 4,104m bushels to 4,129m bushels on the back of better yields. Stronger output means that ending stocks were revised by up by 25m bushels to 245m bushels, higher than market expectations of around 225m bushels. Meanwhile, global soybean ending stock estimates were revised down from 115.6mt to 114.5mt, primarily due to lower beginning stocks amid flat demand. This is slightly below what the market was expecting. Finally for wheat, the USDA increased its 2023/24 US ending stocks estimates from 670m bushels to 684m bushels following a drop in domestic use. The market was expecting stocks to remain unchanged from last month’s estimate. As for the global wheat balance, 2023/24 ending stock estimates were increased from 258.1mt to 258.7mt, slightly above expectations of around 257.8mt.

The Commodities Feed: US natural gas prices spike higher Spot US natural gas prices spiked higher on Friday on the back of cold weather across large parts of the US. Meanwhile, tensions in the Middle East remain elevated following US and UK airstrikes in Yemen last  Energy- US natural gas prices spike higher The oil market saw a fairly choppy trading session on Friday with ICE Brent trading within a US$2.79/bbl range. Brent briefly broke above US$80/bbl amid ongoing tension in the Middle East, specifically the Red Sea, following US and UK airstrikes against the Houthis in Yemen. However, the market was unable to hold on to these earlier gains. While geopolitical risks are certainly building, we are still not seeing a reduction in oil supply as a result of developments in the region. But, the more escalation we see in the region, the more the market will have to start pricing in a larger risk of supply disruptions.   Speculators boosted their positions in ICE Brent over the last reporting week, increasing their net long by 38,905 lots, leaving them with a net long of 208,748 lots as of last Tuesday - the largest position they have held since October. The move was predominantly driven by fresh longs with the gross long increasing by 29,942 lots over the period. Speculators also increased their net long in NYMEX WTI, with the net long increasing by 21,799 lots to 111,129 lots as of last Tuesday. For WTI, the move was largely driven by short covering, with the gross short falling by 20,138 lots. European gas storage has now broken below 80% with colder weather over the last week seeing the largest daily withdrawals from storage so far this winter. However, storage remains above the 5-year average of 68% for this time of year. For now, we are still assuming that European storage will finish this heating season at around 52% full, which suggests limited upside for European gas prices. The US natural gas market has seen increased volatility in recent days and Friday saw a significant jump in spot prices. While front-month Henry Hub futures settled almost 7% higher on Friday, spot prices jumped more than 300% to over US$13/MMBtu due to freezing weather conditions across large parts of North America. Colder weather will lead to stronger heating demand. But there are also supply risks. Freezing conditions expected in Texas could lead to disruption to natural gas infrastructure. Front-month futures have given back a lot of Friday's gains in early morning trading today. There is plenty on the energy calendar this week. On Wednesday, China will release its industrial production numbers for December, which will include output data for crude oil and refinery activity. OPEC will also release its latest monthly market report on the same day, which will include its 2024 outlook for the oil market. On Thursday, the International Energy Agency will release its latest oil market report, while China will release its second batch of trade data, which will include more detailed energy trade numbers. Also, given today is a public holiday in the US, the usual weekly inventory numbers from the API and EIA will be delayed by a day.   Agriculture – larger US corn and soybean supplies The USDA revised up its 2023/24 US corn production estimates by 108m bushels to a record 15.34bn bushels on account of rising yields. As a result, ending stocks are now projected to hit 2.2bn bushels, up 31m bushels from previous estimates. For the global balance, 2023/24 ending stock projections were revised up from 315.2mt to 325.2mt primarily due to larger supplies. Global corn production was revised up by 13.7mt to 1,235.7mt, with supply increases from the US (+2.7mt), and China (+11.8mt). For soybeans, the USDA raised its 2023/24 US production estimate from 4,129m bushels to 4,165m bushels, on the back of stronger yields. Ending stock estimates were revised up by 35m bushels to 280m bushels as a result. Given marginal adjustments in global production and usage compared to last month, ending stock projections for 2023/24 increased by just 0.4mt to 114.6mt. The USDA decreased its US wheat ending stocks estimate for 2023/24 from 659m bushels to 648m bushels following a reduction in beginning stocks. For the global wheat market, the USDA increased 2023/24 ending stock estimates from 258.2mt to 260mt, largely on account of higher stocks at the start of the year. Global wheat production estimates were increased by around 1.9mt to 784.9mt. In addition to the WASDE monthly update, the USDA also released its quarterly grains stocks report which showed that US corn and soybean stocks stood above market expectations as of 1 December 2023. US corn stocks totalled 12.2bn bushels, up 12.5% YoY and above market expectations of 12bn bushels. Meanwhile, US soybean stocks came in at 2.99bn bushels, down 0.7% YoY, but higher than the average market expectation of 2.97bn bushels. Finally, for US wheat, stocks were up 7.5% YoY to total 1.4bn bushels, largely in line with market expectations of 1.39bn bushels.

WASDE update: Higher US corn and soybean supplies The USDA released a fairly bearish WASDE report on Friday with US ending stocks for both corn and soybeans coming in above expectations.   Record US corn production The USDA revised up its 2023/24 US corn production estimates by 108m bushels to a record 15.34bn bushels due to higher yields. This was above market expectations of around 15.22bn bushels. The yield estimates were increased by 2.4bu/acre to 177.3bu/acre. As a result, US ending stocks for 2023/24 were increased to 2.2bn bushels, up 31m bushels from the previous estimate, and above the roughly 2.1bn bushels the market was expecting. For the global balance, 2023/24 ending stock estimates were revised up from 315.2mt to 325.2mt primarily due to larger supplies. The market was expecting a number closer to 313mt. Global corn production estimates rose by 13.7mt to 1,235.7mt, driven by an increase in the US (+2.7mt), and China (+11.8mt). Revisions to both the US and global balance were bearish, which is well reflected in the price action following the release.       Corn supply/demand balance   US soybean stocks rise The USDA raised 2023/24 US soybean production estimates from 4,129m bushels to 4,165m bushels with yields revised up from 49.9 bushels/acre to 50.6 bushels/acre. As a result, ending stock estimates for 2023/24 were increased by 35m bushels to 280m bushels. This was quite a bit higher than expectations of around 245m bushels. Only marginal changes were seen in the global balance, which meant that global soybean ending stocks for 2023/24 increased by just 0.4mt to 114.6mt. Global production estimates were largely left unchanged at around 399mt as gains in Argentina, the US and Paraguay were offset by revisions lower in Brazilian supply. Overall, larger-than-expected ending stocks in the release were bearish for the soybean market.   Soybeans supply/demand balance   Global wheat stocks edge higher The USDA decreased its US ending stocks estimate for 2023/24 from 659m bushels to 648m bushels following a reduction in beginning stocks. This was lower than market expectations of around 659m bushels. Meanwhile, the agency left production and export estimates unchanged at 1.8bn bushels and 725m bushels, respectively. For the global market, the USDA increased its 2023/24 ending stocks estimate from 258.2mt to 260mt, largely on account of higher stocks at the start of the year. The market had largely expected global ending stocks to remain roughly unchanged. The agency revised up its demand estimates to 796.4mt from 794.7mt, driven by India (+1.3mt), and the EU (+1mt). However, higher demand estimates were offset by an increase in production estimates from 783mt to 784.9mt. This was due to increases from Russia (+1mt), Ukraine (+0.9mt), and Saudi Arabia (+1.5mt).   Wheat supply/demand balance

Agriculture: Shipping disruptions from Brazil push coffee higher Arabica coffee front month contract jumped around 7% yesterday as shipping disruptions from Brazil risk tightening the market in the short term. Brazil’s ports are facing strikes by customs officers and other inspectors from 22-26 January that are likely to delay shipments originating from Brazil. The tensions around the Red Sea trade route have further supported coffee prices. The shipment disruptions from Brazil could impact other commodities as well including soybeans, corn and sugar.   According to China’s Ministry of Agriculture and Rural Affairs, soybean production in China reached an all-time high of 20.84mt in 2023 primarily due to the country’s support for food security. Meanwhile, the soybean planting area in China reached 157 million mu (about 10.47 million hectares) last year, while that of oilseed crops exceeded 200 million mu. The ministry added that it plans to further increase the planting of genetically modified corn and soybean crops in a push to boost grain output and bolster food security in the country.   The USDA’s weekly export inspection data for the week ending 18 January shows that export inspections for corn stood at 713.3kt over the week, lower than 946.4kt in the previous week and 728.8kt reported a year ago. Similarly, US soybeans export inspections stood at 1,161.1kt, down from 1,278.2kt a week ago and 1,839.2kt seen last year. For wheat, US export inspections came in at 314.5kt, compared to 242.2kt from a week ago and 349.4kt reported a year ago.