Grain prices were back in the green Tuesday – and in a major way.
Difficult conditions in South America and frost damage in the US motivated a further rise on Euronext and Chicago.
In Paris, all products were rising, in the face of production risks for the next season, with the exception of the March 2021 wheat contract, which is no longer to be considered a week away from its closing.
European rapeseed continues to increase, crossing the level of 500 €/t on May 2021 contract.
This is the highest level reached since 2012.
Prices are rising also for the upcoming 2021 harvest, even if into a lesser extent.
Concerning corn, it is more the South American situation which worries.
The return of a dry and hot climate in Argentina threatens the yield potential of the country’s corn and soybean crops.
In Brazil, it is in contrast to the regular showers which still hamper the good progress of the soybean harvests and the second wave of corn sowing in the country.
So, soybean prices moved more than 1.5% higher.
Corn prices also shot up.
While, deteriorating quality conditions in the U.S. Plains helped push some winter wheat contracts nearly 3% higher.
Also some spring wheat contracts, grabbed double-digit gains in yesterday’s session.
So, turnaround Tuesday that seemed to be the theme in recent weeks, last night did not disappoint both Chicago, Paris.
In the Black Sea area, on the contrary, current-crop cash markets seems fairly quiet on wheat, with little new business reported to start the week.
In add, we note that the Russian export line-ups remain very light relative to the large February push which was racing to beat the tax.
Russian operators, indeed, expect that in March the export activity should be half less than in February.
In February, 3.4 Mt of wheat were exported.
During last week, the export activity has already significantly decreased.
The lowest weekly wheat loading volume has been recorded since mid-July when the campaign was launched.
On the other hand, barley and corn shipments are expected to increase significantly, but in the short term, the market is very quiet and remain on the look-out for demand.
Also Aussie local markets were very quiet, with values off a dollar or two in places, and many in the trade comfortable with their positions for now.
There are still some large parcels on offer and available when people are chasing grain, so there is not much worry on trade desks about additional coverage.
In add, ABARES came out recently with its preliminary 2021-22 wheat estimate at 25Mt, 100,000t above the Lachstock estimate.
These early estimates are no real surprise and of little significance at this point until we start seeing seed go into the ground.
On the international scene, the USA has sold 175,000 t of corn to Japan and Argentina has sold 65,000 t of corn to Taiwan.
The grain is for shipment between late April and mid-May.
Importers in the Philippines reissued a tender to purchase 144.241 t of milling and animal feed wheat that closes March 4, and is for delivery between April and June.
The group passed on all offers in a similar tender last week.
Japan issued a regular tender to purchase 81.645 t of food-quality wheat from the United States and Canada that closes later this week.
Roughly two-thirds of the total is expected to be sourced from the U.S.
Egypt’s state grains buyer issued an international tender to purchase at least 30,000 metric tons of soyoil and 10,000 MT of sunflower oil for arrival in the first half of May.
Bids are due Thursday.
Jordan’s recent barley tender saw results out with two boats at around US$261 c and f for September, a slight discount backed off against recent traded values, but reflecting some increasing shifts in cash market interest towards new-season positioning.
We did finally also see a new flash export sale reported, with 175,000t of new-crop corn to Japan..
The US Department of Agriculture had not announced a sale since February 12.
We note that investors remained focused on the balance between optimism over the COVID-19 vaccine rollout versus pessimism over the possibility of rising interest rates and inflation.
In this context, energy futures faded, with crude oil down 1.25%.
Diesel dropped 0.4%, with gasoline easing 0.3%.
The Dow Jones was down 144 points to 31,392.
The dollar fell slightly, posted this morning at 1.2080 against the euro and 73.80 against the rouble.
To note the continued fall of the Brazilian real.
Tonight we will comment, how will close the sessions.
