The new US stimulus package is still in the works, even though there is some more optimistic discussion about the economic recovery meaning potentially reduced stimulus needed into the early summer there.
However, markets are becoming fairly confident the money is going to hit by early March.
So, even if grains prices came into Wednesday’s session with moderate overnight losses, export optimism kicked off another round of technical buying yesterday that lifted some prices substantially higher by the close.
Indeed, corn raced ahead another 1.5%, while soybeans rose nearly 1.25% and grabbed double-digit gains in the process.
On the contrary, wheat saw a more modest rise in prices.
Market wires are catching on to the realization that sales reporting rules only apply once exports are committed.
Origination can be done without officially or fully completing an export sale though once the sales are completed for export they do need to be reported.
However, it’s entirely possible to build a book prior to finalising overseas sales and hitting the reporting rules.
And prices, indeed, jumped higher, on the expectations of historically large export sales, which USDA is likely to report today.
That ignited a round of technical buying that left grains prices more higher.
Soybean prices followed corn higher, spurred also by lingering doubts over the size and quality of this season’s South American crops.
Wheat prices trended higher, thanks in large part to spillover strength from corn and soybeans.
Watching the facts, Ethanol Industry Association ethanol production, figures hit 936,000bpd, 3000bpd more than the week prior.
Stocks rose to 24.3 million barrels, mostly up in the Gulf.
Brazilian soybean harvest in Mato Grosso was pegged by the government at 5pc complete, with the ongoing moisture related delays and late planting.
That compares with 27pc a year ago.
The late bean harvest is also kicking back Safrinha corn plantings, which were pegged at only 2pc for Mato Grosso, versus 22pc last year, although the few early fields in are reportedly in good condition.
However, ahead of today weekly export report from USDA, analysts are expecting the agency to show a massive amount of corn sales for the week ending January 28, with trade guesses ranging between 236.2 million and 326.8 million bushels.
Those huge numbers, however, reflect several historically large sales to China (including the second-largest single day sale on record) that popped last week.
So, caution remains also ahead of Tuesday’s USDA report, despite we have seen some consensus among traders.
Statistics Canada releases its latest quarterly stocks report tomorrow morning.
Ahead of that, analysts think the agency will show wheat stocks at 933.3 million bushels through December 31.
That would represent a modest year-over-year decline from December 2019 totals of 949.8 million bushels, if realized.
Canadian canola stocks are expected to face a moderate year-over-year decline, falling to 542.3 million bushels, according to a poll of 12 analysts.
On the international scenario, Egypt is considering offers for its tender to purchase 30,000 metric tons of soyoil.
Yesterday was also announced, South Korea has purchased another 60,000 metric tons of soymeal, likely sourced from South America, in an international tender.
A group of South Korean flour mills purchased 1.1 million bushels of wheat from Australia in a deal that closed earlier yesterday.
The grain is for shipment between mid-May and mid-June.
Another South Korean group issued a tender to purchase 1.2 million bushels of milling wheat from the United States and Canada, which closes on today.
Jordan made no purchases in its latest international tender for 4.4 million bushels of milling wheat that closed earlier yesterday.
Rumours persist that export taxes will be introduced for the next season in Russia if prices remain at high levels.
However, no date has been put forward for a decision.
After Egypt’s state grains buyer purchased 480.000 t in an international tender that closed Tuesday, the country’s supply ministry reports that it has enough strategic reserves to last through the end of July.
In add, we must note that Egypt’s local wheat harvest will kick off in two and a half months.
In this context, wheat prices decreased yesterday on Euronext.
This decline mainly also caused by technical adjustments, with the physical market showing little variation.
However, it should be noted that as the end of the March contract approaches, trading is now mainly based on May, the last listed contract for the 2020 harvest.
A cold spell expected over the weekend in the USA and a sharp cooling in temperatures next week in Europe.
Also Aussie locals markets were a whisker softer yesterday, with steady sales being reported early in the day but a few bids pulled later as some buyers finished covering what they wanted for the day.
Logistics are still a top priority and a few vessel delays in Geelong led to some road congestion there yesterday.
The ASX wheat current crop futures settled slightly firmer with March and May up $1.50/t to $299/t and May $303.50.
While March Chicago SRW futures picked up 3 cents to $6.4775, March Kansas City HRW futures gained 6 cents to $6.25, and March MGEX spring wheat futures added 2.5 cents to $6.2350.
MATIF wheat Mar contract down €1.25/t to €224.75/t.
The dollar remains relatively firm posted this morning at 1.2017 against the euro and at 75.90 against the rouble.
Brent crude April yesterday up US$1.00 per barrel to $58.46.
Crude oil continues its rise posted this morning at 56.10 $/b in New York.
