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Global feed market: Crude oil soared and barge freight rates hit a record, boosting U.S. Bay quotations

 Last Update: 2022-10-12
 Source: Internet
 Author: User

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Foreign media October 8 news: In the week ending October 7, 2022, global feed prices have mostly risen, with US Bay corn quotations soaring sharply
.
Grain shipments from the Midwest to the Bay of America fell
as the water level of the Mississippi River led to a spike in barge freight rates.
Support the strengthening of US Bay quotes; International crude oil futures continue to rise, supported by significant production cuts in the OPEC alliance, and also support the price of U.
S.
corn as a raw material for biofuels; The European corn harvest is underway, and the expectation of a reduction in corn production has been confirmed
.
However, the strengthening of the dollar, the sluggish export sales of corn, the possibility of Russia extending the Black Sea Export Corridor agreement, the strengthening of the dollar, and the macro-economy remain worrying, constraining price increases
.

On Friday, the Chicago Board of Trade (CBOT) closed at around $6.
8325/Dec corn on Friday, up 0.
85%
from a week ago.
The spot offer for the October shipment schedule of Meiwan 2 yellow corn was $8.
8325 per pu, up 11.
5% from a week ago; The November 2022 corn period on the EURONEXT exchange closed at around 336.
50 euros/mt, down 1.
3%
from a week ago.
Argentine corn on the upper river FOB quoted at $309/mt, up 4.
4%
from a week ago.

International crude oil futures rose this week to a five-week high, and despite concerns about aggressive Fed rate hikes and recession prospects, the OPEC alliance slashed crude oil production targets this week, boosting oil prices to pick up
.
The Nov contract on West Texas Intermediate Crude Oil (WTI) on the New York Mercantile Exchange (NYMEX) closed at $92.
64 a barrel, up 16.
5 percent
from a week ago.
The global benchmark December Brent crude futures were trading at $97.
92/bbl, up 14.
8%
from a week ago.
The ICE dollar index closed at 112.
683 on Friday, up 0.
53%
from a week ago.

The U.
S.
corn harvest is slow

The USDA's Crop Progress Weekly Report shows that as of Oct.
2, the U.
S.
corn harvest progress was 20 percent, compared with 27 percent in the same period last year, 22 percent in the same five-year average, and 22 percent
expected by analysts.
The excellent rate of maize remained unchanged at 52%.

The 72-hour precipitation forecast released Friday by the National Oceanic and Atmospheric Administration (NOAA) shows that there is little precipitation in the Midwest or Plains between Saturday and Tuesday (October 8 to 11); Weather forecasts for 8 to 14 days show that between October 14 and October 20, the central United States was drier than normal, with seasonal low temperatures in the eastern half of the
United States.
This weather favors harvest advancement
.
The U.
S.
data transmission network said a stream of cold air during the weekend could affect the Midwest and could cause damage
to immature crops.

The pace of U.
S.
corn exports has been slow

USDA's weekly export sales report shows that in the week ended September 29, 2022, U.
S.
net corn sales for 2022/23 were 227,000 tons, down from 512,000 tons a week ago and below market expectations of 350,000 to 800,000 tons
.
Total U.
S.
corn export sales so far this year (both exported and unexported) were 13.
223 million tonnes, down 50% year-on-year and 42%
from the five-year average.
Among them, the sales volume of unloaded corn was 10.
976 million tons, 54% lower than the same period last year and 43%
lower than the five-year average.

The biggest buyers of U.
S.
corn so far this year include Mexico 5.
392 million tons, China 3.
386 million tons, and Japan 1.
034 million tons
, according to USDA data.

Low water levels on the Mississippi River affect U.
S.
corn exports

The low water level of the lower Mississippi River increases the cost of transporting corn from the Midwest to the Bay of America, making U.
S.
corn more uncompetitive
than Brazilian second-season corn.
61% of U.
S.
corn exports pass through U.
S.
Bay
.
On Sept.
28, barge freight rates for transporting corn from central Mississippi to American Bay were quoted at 238 cents per pu, up 60 percent from a week ago and 68 percent
from two weeks ago.
Barge freight rates shipped in October rose 56 percent from a week ago to 238 cents/pu.

By Oct.
5, the October barge freight offer for corn from central Mississippi to Bay of America was quoted at 298 cents per pu, up 95 percent from two weeks ago and 116 percent
from four weeks ago.
As weather forecasts will remain dry in the future, water levels are expected to continue to fall, and more draft restrictions
are expected.

China restricts starch corn exports

Early Monday reported that China was restricting corn starch exports
.
Although exports are relatively small, the move highlights the government's concerns about
food supplies and rising prices.
Customs data shows that China's corn starch exports in August were 900 tons, down from more than 40,000 tons in July and 23,240 tons
at the end of August last year.
The product is mainly shipped to the Philippines, Indonesia, Thailand and Malaysia
.

China imports corn mainly from the United States and Ukraine, the former of which may have lower production, and the latter's exports to China are nearly stagnant
.
China is aggressively expanding into other sources of supply, possibly importing corn
from Brazil.

Brazilian corn is expected to be productive again and exports to grow

On October 6, the Brazilian National Commodity Supply Company (CONAB) expects Brazil's total maize production in 2022/23 to reach 126.
94 million tons, an increase of 12.
5% over the previous year's 112.
81 million tons, of which the first season of corn production is expected to be 28.
69 million tons, an increase of 14.
6% year-on-year; Second-season maize production is expected to be 96.
28 million tonnes, up 12.
4% year-on-year; Corn production in the third season is expected to be 1.
97 million tonnes, down 8.
5%
year-on-year.

Brazilian grain exporters association ANEC estimated on October 5 that Brazilian corn exports would reach between 4.
2 million and 5.
5 million tonnes in October, up from an earlier forecast of 4.
2 million tonnes.

Full-year corn exports are expected to be 41 million tonnes, unchanged from earlier expectations
.

Data compiled by Brazil's Paranagua Authority on Friday showed corn exports from the port of Paranagua reached 3.
43 million tonnes in the first nine months of this year, up 425 percent
year-on-year.
Due to strong demand and ample supply, corn exports from the port in September surged 1138%
year-on-year.

According to the Brazilian Foreign Trade Secretariat (SECEX), Brazil exported an average of 318,800 tonnes of corn per working day in the fourth week of September, up nearly 135 percent
from September 2021.

Weather and other issues faced by other major producing countries have prompted buyers to switch to Brazilian corn
.
In major corn-producing countries such as the United States and Europe, bad weather has led to lower yields
.
In the Black Sea region, Ukraine's corn production this year may be only 25 million to 27 million tons, down from 42.
1 million tons in 2021, as the Russian-Ukrainian conflict makes sowing difficult
.

Brazil's maize production in 2021/2022 reached a record 112.
8 million tonnes, with 2022/2023 production expected to increase by another 12.
5% to almost 127 million tonnes
.

French corn production will hit a new low in more than three decades

On October 5, the French grower group AGPM projected French corn production of 10 million tons in 2022, the lowest level in more than 30 years; Average yields are expected to be 7.
9 tonnes/ha, below the five-year average of 9.
7 tonnes/ha and the lowest electricity generated
since 2003.
Last month, France's agriculture ministry estimated French corn production at 11.
33 million tonnes, the lowest
since 1990.
This year France suffered its worst drought on record, along with several severe heat waves
.

Global maize production has once again been revised downwards

On October 7, the Food and Agriculture Organization of the United Nations (FAO) released a report that estimates world crude grain production to be 1.
468 billion tons in 2022, down 14.
3 million tons from the previous month, down 2.
8% year-on-year, mainly due to the downward adjustment
of US corn production.
Insufficient rainfall in the United States led to further downward revision of its corn yield estimates and a slight reduction in sown area
.
FAO expects global maize ending stocks to decrease by 5.
3% in 2022/23, mainly due to a sharp decline in inventories in the European Union and the United States, and a decrease
in inventories due to increased domestic maize feed use in China.

USDA supply and demand reports could turn down U.
S.
corn production

The USDA will release its next supply and demand report
on Oct.
12.
Analysts expect U.
S.
corn production to rise to 13.
885 billion bushels in 2022, down from the September forecast of 13.
944 billion bushels; forecast range from 137.
66 to 14.
056 billion bushels
.
Analysts expect the average yield of U.
S.
corn to be 171.
8 pupaules
per acre.

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