Activity on the physical market is reducing at the end of the year, however, Tuesday’s global futures markets, lifted a little after the high volatility of recent days.
US political leaders are speaking currently about a new stimulus bill to accompany the bipartisan govt funding bill.
Sentiment has swung in favor of them reaching an agreement although the complaints are already coming in about the reported small size of the stimulus measures.
US Federal Reserve outlooks are due out late tonight (Wednesday in the US), with expectations that they will paint a brighter picture into 2021 with the vaccine rollouts underway, but there’s uncertainty in markets about how much commitment they will make to further bond purchases.
Consequentially, little change on cereals was seen yesterday in Chicago and in Paris, with the activity prevalently focusing on soybean and oilseeds complex to.
Indeed, National Oilseed Processors Association reported 181 million bushels crushed in November, about a million above reported estimates and this is the biggest November on record. The crushing activity posted its third best performance in history.
This element and the uncertainties on the next Brazilian harvest with weather maps that are still bringing widespread moisture to central Brazilian soybean areas into next week below “average” for the time of year, support the prices.
The canola continues its progression in Canada in a context of sustained export activity and in the wake of soybeans.
Rapeseed increased slightly too yesterday, although remaining competitive against other vegetable oils.
Wheat, for its part, founded support in the introduction of Russian export taxes, while corn as a follower.
Russia’s export tax / quota situation continues, recent proposals now signed by the Prime Minister and the € 25 / t tax applied to shipments within the quota tonnage, and a tax of 50pc of fob price applying to over-quota tonnages, will be effective from 15 Feb 2021 .
The introduction of this export taxes for wheat decided by Russia could encourages operators to accelerate their sales between now and 15 February, however, logistics is already running at full speed and this limiting the trade.
So, some operators, have little interest in taking the risk on timing and tax impacts it seems, as we can see here below.
On the international scene, the purchase last night by Egypt of 235,000 t of wheat of which 120,000 t originate from Romania and 115,000 t from Ukraine for delivery during the first fortnight of February, should be noted.
Russian offers were not competitive, as a consequence of the introduction of export taxes.
Infact, C&F values were in the low $ 280s per tonne (including GASC costings) – up about $ 8 / t from their recent buys, and the Russian offers that were in there were in the mid with $ 280s per tonne FOB.
This origin, infact, was offered with a premium of +14 $ / t on FOB basis compared to the Romanian origin.
The FOB and CIF wheat prices in Russia were displayed at the highest level since the beginning of the season.
So, the Russian origin disappears after having been selected without interruption in the previous 12 tenders.
Yesterday, we have seen also a call for tenders from Tunisia for 117,000 t of common wheat, 100,000 t of durum wheat and 100,000 t of feed barley.
We are curious to see the final outcome.
On Australia grain market, Aussie cash board bids were lower by $ 1-2 / t on wheat, while contract bids remained relatively unchanged.
We saw liquidity in South Australia and WA lift on the online exchange platforms.
Jan ASX 21 wheat also traded lower yesterday and settled at $ 284 / t down $ 3 / t.
Big focus now on Victorian bulk handling sites in terms of filling and hitting capacity.
There have already been a handful of sites that have hit capacity on canola segregations, a good problem to have for the bulk handlers
From China hand, some estimates out of China have their pig / sow herd down 10pc below pre-swine fever levels, but up significantly from post cull levels.
So, in this context, the funds were net buyers yesterday for 1,000 lots of corn, 11,000 lots of soybean and 3,000 lots of wheat.
The dollar is not moving much, posted this morning at 1.2160 against the euro and 73.35 against the ruble.
Oil stocks were up, at 1.56 billion lbs the consequence of low demand in the context of the pandemic and crude oil prices are stagnating at the level of 47.50 $ / b in New York.
