Macro Commodity Prices Remain Firm and Bullish

Wheat

• Cash and Futures market remains strong globally as freight follows the same trend. The speculation surrounding Russia capping exports has caused the strong movement of prices.
• The remaining shipping capacity for Australian wheat export has been tight for Nov/Dec/Jan positions.
• Harvest has begun in Australia, and we look forward to having a better overview on the harvest percentage in the next two weeks if the rain holds off.

Corn

• Myanmar corn prices remain to be very volatile over the last few weeks ranging from 350’s- 360’s price levels while the local corn prices are getting bearish toward s the completion of harvest. Global corn yield was improved from an average estimate of 176.0 and 176.3 in September to 176.5. The USDA announced a sale of 165,000 MT of corn to Mexico for 2021/22. World carryout came in larger than the average estimate of 298.8 MMT.

Soybeans/Soybean Meal

• The USDA reported that the export prices for US and Brazil Soybeans declined in September on the slower pace of export sales and slowing China demand.
• South American prices strengthened as supplies declined from harvest.
• Brazil and US soybean meal prices were slightly down; Argentine price rise due to stronger demand with buyers shifting purchases to Argentina away from U.S. Gulf Coast export facilities hampered by Hurricane Ida.

Container Freight

• The continued increase in the container freight is driven by the massive decline in industrial activities, rising covid cases, shortage of manpower, shortage of equipment and containers, order backlogs with extensive port congestions.
• Sellers are starting to provide indications/offers from 30 days shipment window to 45-60 days.
• Shipping lines try to shorten the free time for demurrage and detention from 14 days to 10 days.
• Freight remains to be bullish for Q1 2022 as liners continue to implement their General Rate Increase (GRI). Most sellers are hesitant to show prices yet for Q1 2022 positions.
• Hearing that Maersk Sealand will increase the freight by 700-800$/container starting November due to increased demand & equipment shortages.

Bulk Freight

• Freight rates are seen to stay elevated and volatile until the year ends due to various port congestions, weather-induced supply tightness, fluid COVID-19 protocols enforced at various ports, power cuts at a few Chinese ports, and thin newbuilding order book.

Brent crude oil

• The global energy crunch continues to worsen as Brent crude nears $85.
• Coal futures in China closed a new record high on Monday due the weather- related setbacks for coal production.
• The outlook for gas-to-oil switch has been raised due to the tighter coal and natural gas boosting oil demand.

Forex

• The rising of international crude oil prices, US Federal Reserve’s planned policy tightening, further reopening of economy due to lower covid cases, and wider trade deficit record in August on the back of rebound exports/imports have caused peso to weaken fueling inflation fears.