Jan 17, 2022

Basis Commodities – Australian Crop Update – Week 4 2022

FOB replacement values using the Australian track bid/offer (AUD) – not a FOB Indication

Market Update

Domestic markets remain quiet for the most part. From a demand point of view the export capacity is being dominated by feed grain, lower quality milling wheat and canola at healthy elevation margins. Demand for the remaining milling grade wheat is holding to a hand to mouth buying pattern and feels expensive into the Middle East and East Africa as Black Sea and Argentinian values remain competitive.

Execution remains difficult and a number of ports around the country are suffering from congestion. In terms of capacity, most sellers are now looking at June forward as China seems to have quietly picked up a lot of the remaining first half stem.

Our analyst Agscientia raised their final 21/22 national wheat production update to 36.9MMT on the back of the massive Western Australia deliveries. Barley production is 12.7MMT, canola 6.35MMT and sorghum 2.33MMT. Larger plantings and favourable seasonal conditions have come together to allow Western Australian farmers to eclipse the previous record large harvest by over 30 percent, according to the Grain Industry of Western Australia (GIWA). GIWA said Western Australia produced just over 24MMT of all grains. The exceptional result was a function of a record planted area of 9.2 million hectares, up 7.8 percent on last year and a fifth more than the previous record harvest. Other contributing factors were the early plantings dates, good early moistures as well as mild temperatures which allowed the crop to get off to an excellent start. The favourable early start also prompted farmers to boost fertiliser applications, GIWA said.

The USDA delivered its February WASDE report last week which was in line with pre report expectations. USDA sharply reduced South American soybean production estimates for a second consecutive month while only making a small cut to corn output. This sent soybeans higher with bigger gains in corn as soybean futures have already factored most of the production losses. Funds were large buyers of corn and soybean following the report and to a lesser degree wheat. Soybean and corn futures set eight-month highs.

Weather

Bureau of Meteorology – http://www.bom.gov.au/

Ocean Freight

In ocean freight, owners have been trying to drag the market upwards with charterers that had waited for a clear market picture to emerge after the CNY/Olympics suddenly scrambling for cover. However, by early this week the sentiment was softening.

Australian Dollar

The AUD remained range bound.

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Basis Commodities expands service offering to soybeans.

18 Apr, 2024

In late 2023, Basis Commodities successfully executed its first shipment of premium non genetically modified soybeans from Romania to Egypt, via two small vessels. Basis has many years of experience managing trade flows and relationships within the Middle East and we were pleased when the opportunity to add a new product – Soybeans – arose out of discussions with our suppliers in Romania and buyers in Egypt. To ensure the safe arrival of the produce, the company worked with several parties to facilitate the execution of this new flow for the company including managing due diligence, testing, insurance and contract execution. Soybeans are a primary source of protein and edible oil, making them essential for human nutrition. The largest producers of soybeans in the world are the United States, Brazil, and Argentina. These countries account for most of the global soybean production. Ukraine is the leading exporter of soybeans in Europe. However, Romania is seeing growth in this market after a long hiatus. This growth can be attributed to various factors including increased demand for soybeans globally, improvements in agricultural technology, and favourable climatic conditions for soybean cultivation in Romania. Egypt is among the top importers of soybeans in the world. The country imports large quantities of soybean, primarily for the production of soybean meal, a key ingredient in animal feed formulations. The country's growing population and expanding livestock sector contribute to the increasing demand for soybeans as a source of protein-rich feed. Basis Commodities General Manager in Dubai, Nader Ahmed said assisting companies making connections in the movement of soft commodities is a speciality of the company “we are committed to fostering international trade partnerships and promoting the exchange of quality agricultural products in the Middle East” and “We’re proud to have played a role in bringing premium soybeans into Egypts market”. For more information on how Basis Commodities and assist your business, reach out to the team on the details below