Markets bounced amid markets’ mixed messages.
The latest bearish elements, mainly the rains in South America and the production estimates in Australia, now seem to be integrated and the markets are once again turning to the demand dynamics on the international scene.
And, on the physical markets, the fundamentals held up well and the market was active for the 2021 harvest deliveries, mainly for barley.
China continues to lead the way, with the Chinese authorities’ production estimate of 260.67 Mt of corn, a figure that appears overestimated by traders.
Many producers have already started their contracts for the 2021 harvest, taking advantage of relatively sustained prices compared to recent years.
Vaccinations are continuing in the UK, although warnings about adverse responses in people with existing allergies have hit.
Almost certain to increase some of the fears about the quick approval of the vaccine, although there’s been no immediate indication of a stop to the roll out.
Traders were indeed adjusting their positions on the eve of a new USDA report.
In particular, the market anticipates a further cut in soybean production and reserves among the major exporters.
Global corn stocks could also be revised downwards.
US ethanol production was up 17,000 bpd to 991,000 barrels, although stocks have yet again continued to increase, up 834,000 barrels to 20.1 million.
Average surveyed ending stocks estimates were around 1.7 billion bushels for corn, 170 million bushels (mbu) for beans (down 20 mbu from prior) and unchanged on wheat.
However, the session was also animated by Coceral’s 2021 production estimates.
The organization anticipates in particular a 15 Mt jump in the European soft wheat harvest, to 143 Mt, while the barley harvest should decline slightly to 61.5 Mt.
Rapeseed production would increase by 1 Mt, to 17.8 Mt.
Infact, France Ag had pegged winter wheat acres up nearly 500,000 hectares to 4.73 million hectares (mha).
It is below ideas by many of closer to 5mha.
Barley was estimated at 1.3mha, winter canola at 1.1mha.
In corn, there is little change in the Coceral estimates, with a first production estimate for next year at 63.1 Mt compared to 62.8 Mt this year.
At the French level, the soft wheat harvest is estimated at 36 Mt, against barely 29 Mt recorded this year!
The rapeseed harvest would progress from 150 kt to 3.4 Mt.
Russian food security discussions are back in vogue after comments from President Putin about the need to keep prices affordable.
Russian President sees the rise in the prices of sugar, sunflower oil, bread and flour as an attempt to bring domestic prices into line with world prices, he declared during a meeting on economic issues.
He expects concrete measures to be taken to combat the current negative price dynamics.
Speculation about the possibility for an export tax has also been encouraged by the implementation of a sunflowerseed export tax.
So, following this speech, the forthcoming increase in the export tax on sunflower seed from 6.5 to 30% seems inevitable.
Argentine ports were closed by an other strike action.
Port inspectors scheduled a strike for 24 hours and potentially another 24 to follow.
However, Aussie cash markets were a touch more stable on the bid boards as the bleeding stopped for a day.
Port Adelaide zone barley was up $3-4/t as it found some bid support to the grower from the major exporters.
Australia canola felt the heat of the offshore move lower and was down $5-6/t.
Sorghum in the north Australia has copped a hiding in the last 28-48hrs with new season bids and offers dropping $50/t or more on the back of models for improving forecast weather conditions.
On the international scene, the USA sold yesterday 257,071 t of corn to Mexico.
In this context, Euronext took off sharply in the green on Wednesday, in the wake of Chicago with funds net buyers yesterday for 17,500 lots of corn, 9,000 lots of soybean and 13,000 lots of wheat.
Almost all products showed a net rebound on Chicago and Euronext to, in a context where traders are correcting the decline of the last few days ahead of tonight’s USDA report.
So, wheat bounced about 2pc into the US trading session.
Rapeseed bounced back yesterday in the wake of palm and canola prices.
Infact, it price rose by around 4 €/t on all Euronext contracts, correcting the downturn at the beginning of the week.
Palm oil prices have not changed much this morning before today’s MPOB report.
Other markets firmed 1pc or less.
