Wheat continued to rise.
Corn was eased.
The crude oil is dealing higher this morning, close to 47 $/b in NY.
The oilseeds markets were mixed yesterday.
However, prices should find some support today from the rebound of canola, palm oil and crude oil.
Australia grower cash bids were up a buck or two along the east coast and WA, while South Australia wheat values were relatively unchanged
East coast canola bids showed a touch more strength being up $2-3/tt.
Freight rates continue to remain firm. With a strong export program on for December truck availability is tight and in high demand.
The funds on Chicago markets, were net buyers in 11.000 lots of wheat but net sellers in 11 500 lots of corn and 5 000 lots of soybean.
The Eurodollar remains steady at 1.2160 and the Rouble is dealing at 73.00 vs. Dollar.
The US dollar index weakened slightly to 90.8.
By US export sales weekly reports, we have seen a regular activity.
Wheat was slightly above expectations at 0.6Mt of wheat, 1.4Mt of corn, and 569,000t of soybeans.
On the wheat side, there was a new boat of China wheat in the mix, and 104,000t of unknown sales that some believe are China.
Milo/sorghum had two boats sold, one to China, and one to unknown destination, probably China.
Yesterday, USA sold 344 342 tonnes of corn to Mexico.
In this context, speculation on markets has been fuelled yesterday by rumours too about a possible implementation of export taxes in Russia on some products, including the wheat and sunflower.
Russia is facing high food inflation, linked to the strength of world prices but also to the fall of the rouble in recent months.
The Covid-19 has hit the growth and the fall of crude oil prices impacted country’s revenues.
A possible export tax could come along with a revision of the wheat export quota. As a reminder, it is currently fixed at 17.5 Mt for the period Feb15-June 30.
Everyone has their own speculative idea about what the level and impacts will be.
Many are drawing comparisons to the existing taxes on other items and the 2015 mechanism, which would imply a 50pc tax above a certain price threshold, but no official decision has been taken so far and volatility may remain high.
So, cash markets have been in a flurry in the Black Sea region with the speculation, and there are lots of questions about the implementation and timing.
The next meeting on the subject is scheduled for 14 and 15 December and USDA yesterday revised up the Russian wheat production by +0.5 Mt to 84 Mt.
It should be noted that the data provided by the Russian authorities on the progress of the wheat harvest shows a gross weight crop equal to the record level of 2017 when production reached 85.17 Mt in net weight.
WASDE values were no big surprise with corn at 1.7 billion bushels ending stocks, beans 175 million bushels (mbu), and wheat 862 mbu, although given the price response there were some in the bean market who had held out private hopes for a larger stocks cut in this report.
It was considered as relatively bullish for the wheat due to the drop in the US ending-stock and an overall decline of stocks with main exporters at world scale.
However, the arrival of a larger than expected harvest in Australia somewhat mitigates this opinion and the US minister has been rather conservative in predicting the Australian crop at 30 Mt vs. 31.2 Mt seen by Abares.
In addiction, yesterday, France Ag. revised too up its wheat export estimations for France toward third-countries at 6.95 Mt vs. 6.85 Mt and in spite of this, the wheat end-of-year stock is left unchanged at 2.5 Mt and barley at 1.2 Mt.
Only the ending stock of corn is revised downwards to 1.9 Mt compared to last month’s estimate of 2.2 Mt.
World figures saw Brazilian beans unchanged while Argentine corn and beans were both cut by 1 million tonnes.
With the WASDE out of the way, the next big report for the markets will be January’s stocks and winter wheat acreage reports.
Stocks will be closely watched for indications about any corrections to the US row crop balance sheets, as this is the Q1 feed-usage-and-residual driver. while seedings are the first formal estimate on new crop winter wheat plantings there.
South American weather maps are still in need of rain.
The next two week’ outlooks across central Brazil have light showers but still well below normal, and almost nothing in Argentina.
So, the Argentinean corn production has been lowered by -1 Mt at 49 Mt.
Brazil is still seen at 110 Mt, which looks rather optimistic considering the current situation.
The soybean production of Brazil has been left unchanged at 133 Mt while the Argentinean one has been cut by -1 Mt to 50 Mt.
Chinese imports are maintained to the high level of 100 Mt. At 85.64 Mt, the world soybean ending stock has been lowered by 0.9 Mt from last month.
