US grains prices were mixed but mostly higher after a fairly choppy session.
Corn finished almost 0.75% higher, thanks in large part to a large sale to China reported this morning.
Soybeans also moved slightly higher on some technical buying.
However, some uneven technical maneuvering kept some wheat prices slightly in the red, although losses were relatively minor.
On Wall St., the Dow dropped to 32,825 as investors turned their focus to an upcoming meeting from the Federal Reserve that could offer guidance on interest rates, inflation and the economic recovery.
Energy futures trended lower as well, with crude oil dropping 1%.
Gasoline dipped 0.25% lower and diesel down around 0.8%.
Entering inside the facts, US corn prices emerged from a choppy session with moderate gains despite the large sale to China triggered more technical buying.
Private exporters, indeed, announced to USDA a new corn flash sale of 1.156 million tonnes (Mt) of old crop (20/21).
However, some questions arose about whether this will result in offsets against existing unknown sales, even if at the same time bulls was treating it as confirmation of the demand program despite the tight US balance sheet.
In add, with planting season just around the corner, in an operation where are lots of people and pieces in moving, it’s tempting when something doesn’t go according to plan to just make an alternative decision very quickly.
There are some situations where a quick decision is necessary, but even in those cases, still probably there is still time to think it through – even for just five minutes or so.
And all could change.
About this, Texas corn planting progress had lifted to 26pc, right about average, and there is talk of scattered early plant wheat/corn/beans in northern areas in recent days with the warm weather.
Early planters are taking some risk about a spring cold snap, but some will play the gamble.
The US prospective plantings report due for release on 31 March will provide USDA’s first official plantings estimate of 2021 corn, beans, spring wheat and sorghum area.
Soybean prices still benefits from the doubts displayed on the crop production in Brazil, with rains that persist in key regions such as Mato Grosso and Parana even if now brazilian weather maps become gradually shift towards the drier side, finally giving some relief to the messy harvest.
In this context, Brazil’s Abiove is still predicting a record-breaking production of 4.953 billion bushels and the exports for 2021, at 3.086 billion bushels.
US wheat was under pressure linked to the improvement of the crop rating and following the possibility by the Russian government to lift its export tax rules in the event of an easing on the balance sheets.
Yesterday afternoon, indeed, USDA reported that quality ratings improved.
The US crop conditions saw Kansas, Colorado and Oklahoma raised their estimates for “good to excellent” winter wheat to 38%, 57% and 25%, respectively.
The weather maps are also showing good precipitation over the next few days, which should allow further improvements in growing conditions across the Atlantic.
Canola and palm prices gave ground yesterday, dragging rapeseed without their wake.
In Malaysia, operators expect palm production to increase in the coming weeks.
European grains and oilseeds prices had a mixed session mainly down, in a context of reduced activity on the physical market and in the absence of fundamental news.
Another factor that weighed on european prices, was the speculation about Russia potentially cutting the export tax program.
The news, indeed, has done the rounds after comments from Russia’s Ag Minister even if he also re-emphasized their focus on domestic markets though, suggesting that any changes may be far away.
So, wheat prices on Euronext declined.
European corn, for its part, followed wheat in negative territory.
Rapeseed and the whole oilseed complex have for their part been weighed down also by the drop in crude oil prices.
The price of a barrel is indeed weighed down by profit taking, as well as by fears about the AstraZeneca vaccine.
Germany/France/Italy, indeed, suspended use of the AstraZeneca vaccine amid health concerns.
So, investors fear that the slowdown in the vaccine campaign will delay the economic recovery of the Old Continent, and therefore global oil consumption.
Prices nevertheless remain very volatile on the vegetable oil market.
About this, Ukrainen Ministry of the Economy could sign a memorandum on stabilizing the prices of sunflower oil and bread.
In Germany, the producers’ association shows an estimate of the 2021 all-wheat harvest at 22.34 million tonnes just 1% above last year’s harvest.
Some frost damage is possible from subzero temperatures earlier this winter, but snow cover kept the crop in relatively good shape.
Winter barley production increased by 2.7% to 9.07 million tonnes.
Spring barley production is said to be down to just 1.89 million tonnes, a consequence of the drop in areas.
Finally, rapeseed production is estimated at only 3.48 million tonnes, still down slightly compared to last year.
Egypt, which is often the world’s No. 1 wheat importer, expects a local production of around 128.6 million bushels this season.
Harvest typically begins in mid-April.
The country’s state news agency reported today that its current strategic wheat stocks will last approximately 4.7 months.
On the international trade scenario, Pakistan received multiple offers in its international tender for 11.0 million bushels of wheat that closed earlier yesterday.
The grain is for shipment in August.
However no buys were reported.
Japan is looking to buy nearly 5.0 million bushels of food-quality wheat from Australia, Canada and the United States in a regular tender that closes later this week.
Of the total, 42% is expected to be sourced from the U.S..
On the political hand, a first under the new US Administration, the US Secretary of State will meet with Chinese officials on Thursday.
The trade deal doesn’t sound like a key talking point, but the meeting will be closely watched for indications about the potential for future conflict over other topics, which will likely include the conflict in Hong Kong and the Uighurs.
Aussie federal government made comments the other day suggesting that they finally will be following up on the China/barley situation with the WTO.
Any WTO proceedings are unlikely to have any near-term impacts and can drag out for years.
