Grains prices moved higher Monday, with some contracts that were up as much as 2%.
The markets were supported by climatic consequences for the crops in the US.
In Black Sea very negative temperatures in the South of Russia and East of Ukraine could be a threat for the crops that are not enough protected by a snow layer.
Crude oil jumped two bucks and the DOW lifted 138 points as the US dollar dropped sharply.
In add, wheat was also driven by a Saudi purchase which took the market by surprise.
The Sago (Saudi Grains Organization) has in fact contracted 355 kt of wheat without going through a public call for tenders.
The origins are said to be Australian, Canadian and Ukrainian.
Worth noting, however, that these private purchases are in part a subsidy program to support Saudi owned farms around the world.
SAGO indeed, is still expected back in the market.
Yesterday there was, also the crop rating of the winter wheat in Texas was 40 % of good to excellent against 43 % posted last month.
In such context, the firmness on all products dominated in Chicago and also European grains started the week with a further bullish performance.
Consequently, wheat prices found substantial footing to start the week, with some contracts jumping more than 2% higher.
Also corn prices climbed about 1.5% higher on a round of technical buying largely spurred by gains in a broad range of other commodities, first wheat.
Soybean prices carved out more modest gains on a round of technical buying inspired mainly by a very slow start to the 2020/21 Brazilian harvest, the slowest start in a decade.
The consultancy AgRural, indeed, reports that the country’s 2020/21 soybean harvest is only 15% as recent rains have caused a slowdown for farmers there.
Just for an exemple, at the same time a year ago, 31% of the crop had been harvested.
Argentine consultancy Pablo Adreani and Associates told Reuters they expect the country’s soybean production potential will reach 1.837 billion bushels, citing favorable rains in late January and early February.
The group also expects corn production to reach 2.008 billion bushels this season.
Both crop estimates are a bit higher than prior forecasts from the Rosario grain exchange.
Palm oil as the canola was on the rise and this, have should underpin also the rapeseed, however, European rapeseed on the other hand suffered some litle losses.
Really, oilseed prices could been boosted also due the jump of crude oil at 62.70 $/b in NY.
Energy prices indeed, captured big gains, with crude oil up nearly 2.5% as recent closures from last week’s severe winter weather in Texas have significantly altered the tilt between supply and demand.
Diesel and gasoline also rose nearly 2% higher.
In add, after careful consideration, the U.S. EPA said it agrees with the U.S. Court of Appeals for the 10th Circuit’s reading of the RFS small refinery exemption provision.
That means that the agency may extend existing small refinery biofuel blending exemptions but may not create new ones.
Regular US export inspections were largely as expected with 1.2 million tonnes (Mt) corn, 0.7 Mt beans, and 325,000t of wheat.
Milo to China was reported as 123,000t.
Still no new sales flashes in the US, although there’s been more Chinese buying interest for beans reported again in Brazil and for corn in Ukraine.
On 21 February, EU has imported 4.29 Mt of rapeseed vs. 4.47 Mt last year to date.
European Union corn imports for the 2020/21 marketing year are now at 10.4 Mt through February 21, according to the latest data from the European Commission.
That’s a year-over-year decrease of nearly 28% from a year ago.
European Union soybean imports during the 2020/21 marketing year reached 343.9 million bushels through February 21, which is trending 2.5% above last year’s pace so far.
EU soymeal imports are down moderately year-over-year.
European Union soft wheat exports for the 2020/21 marketing year are down 18% from last year’s pace, with 16.59 Mt through February 21.
EU barley exports are also trending slightly lower year-over-year, with 4.75 Mt.
On the international market, Algeria bought 150 000 t of feed barley, optional origin.
Japan issued a regular tender to purchase about 57 000 t of milling wheat sourced from Australia, that closes Thursday.
The grain is for shipment in May.
Jordan issued a new tender to purchase 4.4 million bushels of milling wheat from optional origins, which closes February 24.
The grain is for shipment in October and November.
On political hand, the new US stimulus bill, and all the added non-stimulus items, continues to push forward through the legislative process.
It’s expected later this week to pass through the House before heading to the Senate.
The European Central Bank president made comments to the effect that the bank would take further action if needed to keep longer term yield curves down, worrying that any yield rise could impede the economic recovery.
It’s always tricky to interpret Chinese politics (and the impacts of the political decisions there) with any degree of confidence, but many have taken notice of the new “#1 Document” released the other day and it’s focus on improving food security by driving higher domestic crop yields.
Tonight we will see how the sessions close.