Matif started its week in the green, despite pressure from Chicago.
The Euronext March wheat delivery have seen accross 250 €/t, even if we note that it is evolving erratically a few days ahead of its expiry.
The other prices, looks more mixed.
To better analyse the market trend’s, however, maybe it is now necessary begin to watch the other deliverys trend.
On Feb. 28 and from the beginning of the marketing year, the European Union has exported 17.56 Mt of wheat and 4.91 Mt of barley vs. respectively 21.48 Mt and 5.14 Mt last year to date.
The imports of corn amount to 10.6 Mt vs. 14.83 Mt last season to date.
In this scenario, we continue to see a good international demand and some supply concerns that have keepped Euronext in the green.
On the international scene, indeed, Algeria has launched a durum wheat tender for 50.000 t, while Iran is seeking 400 000 t of feed barley.
Iran also issued international tenders to purchase up to 30,000 metric tons each of soyoil, palm oil and sunflower oil, which close today and are for shipment in April.
In add, yesterday Russia has implemented the doubling of the wheat export tariffs that is now posted at 50 €/t, that also contribuited to push up european prices.
In the meantime, however, US prices were weighed down by profit taking.
Expectations for record-breaking harvests in South America and record-breaking plantings in the U.S. applied ample downward pressure yesterday.
In fact, Brazilian consultancy AgRural, raised its 2020/21 soybean production estimates by nearly 1% compared to its January estimates to 4.887 billion bushels – a record-breaking haul, if realized.
AgRural’s latest survey concludes 25% of the crop has been harvested through February 25.
That’s up from 15% the prior week even if well behind last year’s pace of 40%.
In add, USDA has set crop insurance price guarantees at $4.58 per bushel for corn and $11.87 per bushel for soybeans, climbing to the highest level since 2013.
Corn price guarantees are 18% higher than a hear ago, with soybeans up 29% versus 2020 levels.
This favourable context will probably push farmers to seed as much as they can.
Some worries also persist over stiff overseas competition, particularly that from Russia and the Black Sea region.
And more, China sold another 61.8 million bushels of its state reserves at wheat on auction earlier today, which was 41.7% of the grain available for sale.
The country has offered nine similar wheat sales since the beginning of December as the domestic feed market looks for lower-cost alternatives to corn.
We note that there are still no flash reports of US export sales business to encourage the bulls.
In add, rumours doing the rounds about additional Chinese bean purchase in Brazil isn’t helping any ideas for further US-origin demand either.
Monthly US ethanol production for Jan 2021 (NASS crush report) was 415 mbu, down from 431 mbu in Dec.
In this context, corn prices tilted about 1.5% lower, and also soybean prices suffered double-digit losses, felling around 0.8%, despite coming into Monday’s session with solid overnight gains, and in spite regular US weekly export inspections, came in more solid mainly for US row crops.
Indeed, corn was 1.64 million tonnes (Mt) and beans 879,000t, while wheat at 272,000t was on the lower end of expectations and milo was 121,000t.
Consequently, US wheat prices lossed more.
On the contrary, in oilseeds canola and rapeseed prices increased despite the downturn of the soybean.
The rapeseed is now getting close to the 500 €/t symbolic threshold on Euronext.
Between good demand from oilseed processors and very limited availability until the next harvest, tension is indeed strong on the oilseed market.
Palm oil, on the contrary, is losing ground this morning in Kuala Lumpur, consequence of the drop in exports in February (-4.6% from January).
Tonight we will see how they will close the sessions.
