Soybeans suffered heavy losses in Chicago.
US corn and wheat prices also sputtered.
Traders, indeed, engaged in a round of technical selling and profit-taking after unwinding a portion of their large net long positions.
Consequently, corn and soybeans each stumbled more than 2% lower.
Losses for wheat futures were generally more muted, although Kansas City HRW contracts were also down around 2% today.
European market, on the wake of Chicago, continued their technical correction yesterday, with a modest correction in cereals, while we have seen a more significant loss in oilseeds with rapeseed down 11,50 €/t.
It is in fact on vegetable oils that speculation is the most noticeable, with the consequence of excessive volatility.
The US corn market had a hangover after USDA failed to provide fresh bullish news on Tuesday.
Broad-based selling across the other grains and soy markets added to the negative tone and triggered fund liquidation.
The market is struggling to find fresh bullish reasons to strengthen.
Additional pressure came from forecasts calling for significant rains across much of Argentina next week even if the rains could be too late to help some of the crop.
In fact, this would be timely only for the portion of crop that is still in the key reproductive stages.
Ahead of the next USDA export report, will come out this morning, analysts expect the agency to show corn sales ranging between 16.7 million and 33.5 million bushels for the week ending March 4, expressing a fair amount of certainty that actuals will bounce back from the prior week’s disappointing tally of 6.1 million bushels.
Also soybean prices dropped dramatically lower after fighting through a choppy session.
Traders largely ignored reports of significantly lower yield expectations in Argentina, engaging instead in a round of technical selling and profit-taking.
The sell off in soybean meal prices, indeed, threw a scare into the soybean futures market.
Indeed, soy meal closed down, hitting a 10-week low while soybean oil after hitting another new contract high, backed off to end down 4 points at 53.51 cents.
It’s likely that much of the pressure on soybean meal futures is from spreaders buying the bean oil and selling the meal.
Those spread trades will have to be unwound at some point, which should support the presently underperforming meal market.
In add, also the failure Tuesday’s USDA supply and demand report to deliver any fresh, bullish news encouraged fund long liquidation.
Ahead of today’s weekly export report from USDA, analysts expect the agency to show soybean sales ranging between 9.2 million and 23.9 million bushels for the week ending March 4.
Analysts also expect to see another 100,000 to 250,000 metric tons of soymeal sales, plus 5,000 to 20,000 MT of soyoil sales.
On the other hand, weekly Ethanol Industry Association data had production finishing the bounce back, following the cold-snap shutdowns, to 938,000 bpd.
Stocks dropped 355,000 barrels, more draw-downs occurring in the Gulf which could imply it was tied to further exports.
Renewable Identification Number (RIN) values are up yet again, with the new administration showing no interest in issuing waivers.
About US wheat prices, they hitted a five-week low, pressured also by the solid declines in corn and soybean futures markets.
The wheat market, indeed, continue to be heavily influenced by the corn and soybean markets and swings in the value of the dollar and impacts on U.S. exports.
In add, wheat prices also came under pressure on forecasts for showers in the southern Plains and Midwest the next 10 days.
It may be enough to boost growth with moderate temperatures during green-up.
Ahead of this morning’s weekly export report from USDA, analysts think the agency will show wheat sales ranging between 5.5 million and 16.5 million bushels for the week ending March 4. Actuals will need to at least reach the middle of that range to best the prior week’s tally of 8.9 million bushels.
More rumours emerged about China booking SRW wheat.
Though this story did the rounds yesterday also, there was no confirmation in terms of flash sales reports.
US barge and rail markets both are very firm this week as existing corn business continues to be executed to China.
The disappointing USDA report and increased French stocks kept european prices in negative territory, putting Euronext in red.
FranceAgriMer, indeed, in its monthly report, revised upwards its estimate of end-of-season wheat stocks to 2.7 million tonnes, a consequence of the revision of intra-Community exports to 5.8 million tonnes against 5.9 posted last month.
Third country exports remain posted at 7.5 million tonnes.
The fine stock in barley goes from 1.03 to 1.06 million tonnes, while in maize the fine stock is raised to 2.0 million tonnes against 1.9 estimated last month.
However, there was more rumour, again not confirmed, of more interest by China in old crop Ukrainian corn this week and so, the Ukrainian domestic market reportedly ignored the sell-off last night to hold fairly flat in cash US dollar terms.
Meanwhile sunflower ukrainen seed prices continue to rally.
On the single day yesterday, prices were climbing over $ 20 / t.
On the domestic market, prices are at record levels, despite the drop in the VAT rate from 20 to 14% recorded only 10 days ago.
On the international scene, the decline in grains, has generated a new call for tenders from Egypt on wheat today, to shipping in April 15/25.
In view of the prices posted by the main exporters, competition promises to be tough between the different origins.
Answers will be in the afternoon on this day.
Algeria for its part could have bought between 450 and 500 thousand tonnes of wheat according to market rumors at a price of 323 usd / t cif optional origins.
This will remain to be confirmed.
Turkey issued an international tender to purchase 115,000 t of animal feed corn from optional origins with a deadline of March 18.
The grain is for shipment between March 25 and April 20.
The Philippines issued a tender to purchase as much as 14.1 million bushels of animal feed wheat, which closes on March 11.
The grain will be split among seven separate consignments that are for delivery between June and December.
But yesterday was marked by very important external events, mainly financial point of view.
Much as expected, the US$1.9 trillion new US stimulus bill has passed and markets now are looking to see how effective it will prove.
Meantime, energy futures continued to trend higher, with crude oil up around 0.5% to stay above $64 per barrel and Brent to $67.9.
Gasoline jumped 1.25% higher, with diesel up around 0.4%.
The DOW was up 477 points.
To note, that US consumer prices did go up 0.4% in February, but that was in line with analyst expectations.
Daylight saving time will commence this weekend in Chicago, which will push market opening and closing time forward.
