Supply and demand fundamentals remain solid for grain prices, but traders took an opportunity yesterday to liquidate some of their longer positions – especially for soybeans.
That led on Chicago to a round of technical selling that pushed prices 1.5% lower, incurring double-digit losses in the process.
Corn saw fractional losses.
While wheat and soybean contracts dropped significantly lower on a round of technical selling, with some contracts losing more than 2.25%.
Euronext, for it’s part, evolved erratically despite an accumulation of new carriers, finishing again without a clear trend.
In fact here, only rapeseed soared on its short-term contract on the eve of its expiration, even if long deadlines corrected lower, in the wake of a drop in Canadian canola.
Maybe we could hav a rebound this morning.
In fact, the tension on the oil market is tending to increase with the announced increase in export taxes on Indonesian palm during the month of February.
To return on grains, despite massive new corn sales hit again in the US, with a flash reported 1.7 million tonnes i.e.old corn crop to China and 214,000t to unknown, we have seen grains came under sell side pressure overnight, as markets ran out of a new bullish buying interest.
In the meantime, weekly export sales were better than expected for corn at 1.8Mt.
However, beans were at 466,000t old crop, and new crop at 1.5Mt.
Wheat was 381,000t (including a new China boat) and milo was 185,000t but included a Chinese cancellation.
Obviously, the soy complex, weighed on the down trend after the announcement of this particularly disappointing US international sales.
Corn sales, on the other hand, remained very firm and the session has animated, even if at the end prices in Chicago remained stable, while Euronext moved in dispersed order.
This export momentum to China is poised to slowdown considering limited remaining supplies for this marketing year, therefor, funds has preferred took some more profits on their long positions, mainly in soybean and wheat.
The European Commission has revised upwards the EU soft wheat exports estimation toward third countries to 26 Mt vs. 24 Mt seen last month, however, we note the wheat carryover stock has been revised up, due to a sharp reduction in the animal feed consumption.
The Buenos Aires exchange revised downwards the Argentinean soybean production estimate to 46 million tonnes, as a result of recent months dryness.
Brazilian rains remain heavy on the maps across central soybean areas into next week, and so, this driving some to push back their harvest estimates slightly further.
Heavy snows in parts of the Black Sea region are causing some localised logistics delays in much of Ukraine and a few spots in Russia, but boosting optimism about the dormant winter wheat crop as we approach spring.
USDA overnight suspended Coronavirus Food Assistance Program payments to farmers pending new Biden administration “review”.
So, as we can image, in this truble context, became still more hard to do forecast.
On the financial market, Wall St., the Dow jumped 473 points higher in afternoon trading to 30,776.
The Eurodollar is dealing at 1.21 and the Dollar vs. Rouble is close to 76.00.
On the energy hands, energy futures were mixed but mostly lower.
Crude oil sank 0.75% lower to stay just above $52 per barrel.
Diesel also dropped 0.3% this afternoon, with gasoline firming by about 0.25%.
We will see tonight as sessions close.
