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Aug 19, 2021

Ag Prices Under Pressure Along With World Financial Markets

World Wheat Buyers Surface

  • Egypt bought 120,000 tonnes of Romanian wheat and 60,000 tonnes of Ukraine origin for October delivery.

  • The average price paid of $331.58 per tonne was nearly $38 higher than their last purchase on July 31.

  • There were relatively few offers with only two cargoes each from Romania, Ukraine, and Russia.

  • The offers from Russia were nearly $20 higher than the Romanian and Ukraine offers.

  • Algeria bought as much as 290,000 tonnes of French wheat for the last half of September.

  • Iran was reported to have bought at least 120,000 tonnes of German, Baltic, and/or Black Sea wheat.

  • Philippines tendered overnight for 280,000 tonnes of feed and milling wheat, while Pakistan is expected to buy 400,000 tonnes for Sep-Oct delivery.

  • Bangladesh was in early this morning seeking offers on 50,000 tonnes of milling wheat for October shipment.

  • Jordan tendered this morning for 120,000 tonnes of milling wheat.

FBN’s Take On What It Means For The Farmer: World buyers are paying higher prices as they deal with several supply issues. Quality problems in Europe continue to be a concern. Uncertainty about Russia’s weekly floating export tax continues to limit offers of Russian wheat. In North America, the severe shortfalls in spring wheat and US white wheat production are expected to be supportive.


US Fed May Reduce Stimulus

  • World financial markets are lower, after the Federal Reserve signaled it may start withdrawing liquidity from the market this year.

  • Continued spread of coronavirus and slowing growth in China increase concerns the global economy will weaken without continued support.

  • The Bloomberg index of commodity prices has fallen to a one-month low as crude oil is dropping for a sixth consecutive day.

  • The trade is expecting further clarification on the timeline of stimulus reduction at the Fed’s conference August 26-28.

FBN’s Take On What It Means For The Farmer: The supply issues facing grain markets have been well covered, but there has been less discussion of the demand side of the balance sheet. USDA surprised the market by lowering US exports for the coming year in its last report. Large speculative funds have also helped to support prices as they allocated more resources to the ag markets. However, this investment is at risk if Fed action leads them to unwind that trade.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

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Kevin McNew

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Marketwatch: Dec, 03

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.6309
high: 5.6797
low: 5.6159
close: 5.6309

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 11.9852
high: 12.1581
low: 11.9477
close: 12.111

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.119
high: 8.2535
low: 8.054
close: 8.2002

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.5939
high: 7.7096
low: 7.5239
close: 7.6525