Yesterday wheat futures rose 2pc and oilseeds fell.
It was an eventful session on the markets, mixed between the improvement in weather conditions on the American continent and sustained activity on the international scene.
The main question will be whether China’s purchases seen in recent months will continue in 2021, or whether demand will slow down as stocks are replenished and prices remain high.
Infact, a great uncertainty remains on the oilseed market.
So, Chicago SRW wheat finished the day up +11 1/4¢, KC + 14 3/4¢, Minny +6 3/4¢, while Matif wheat was off three quarters of a euro.
Funds activity continues to have a strong impact on prices, with profit-taking on long positions which weighed heavily yesterday, particularly in soybeans.
In this context, the funds were net sellers for 8,500 lots of soybeans but net buyers for 12,500 lots of corn and 10,500 lots of wheat.
We think that volatility will remain also today, in a context becoming increasingly tight as we approach the Cristmas festive season.
While corn gained 3¢, beans dropped nine cents with more optimism about the South American crops pushing in (Winnipeg fell $4.2, Matif -0.75€).
Crude oil has picked up three quarters to $45.3 WTI / $48.3.
The USD index is slightly weaker again to 91.1, with the AUD breaking 74¢, the CAD at $1.292, and the EUR $1.210.
Operators will follow with interest the weekly US export figures.
Yesterday we have seen South Korea to buy 65,000 t of corn and Thailand 54,000 t of feed wheat.
But, the main element is the rise of the euro against the dollar.
This rise in the euro has an impact on EU competitiveness, particularly in the face of American origins.
The ruble also rose to 75.10 against the dollar.
However, it will have little impact on the Black Sea basin, because of a rise in the ruble and the grivna.
The fact remains that the European balance sheet is very much in deficit this year.
South American weather maps have continued wetting some, with the last runs filling in spots in central Mato Grosso that were on the lighter edge in previous models.
We’re still days away from any reality on the ground, but optimism is leaking in.
The next USDA WASDE is due out a week from tomorrow, on 10 December.
New ethanol figures saw stocks increasing yet again, hitting 21.2 million barrels despite a small decrease in crush.
Gasoline demand remains a concern.
US October soybean crush came in at 196.5 million bushels, about as expected and a new record for October
Indian wheat reportedly finally hitting the export market in a bigger way with rumours that some 200,000t was sold across the border to Bangladesh.
It was a little over a month ago that overland exports there were briefly suspended after allegations that stolen government wheat was being sold.
Russian weather maps remain dry.
Winter crop sowing has now been completed in Ukraine.
Regardless of the crop, a decrease in the area compared to last year is to be noted.
6.04 Mha of winter wheat were planted, 0.4 Mha less than last year.
The winter barley areas decreased by almost 70,000 ha to 940,000 ha this year.
The decline in rapeseed is the most significant, due to the early nature of planting conducted in a context of summer and autumn drought.
The authorities report areas of 880,000 ha compared to more than 1 Mha last year.
Aussie cash markets slide lower through wheat, barley and canola.
Australia harvest is well and truly in swing and production is getting bigger.
ASX wheat January contract is now trading at full carry to the March contract with Jan going through at $282.50/t for small volumes trading a couple of bucks softer than previous day.
