Cereal prices did not change much yesterday.
This Thursday morning is marked by the decline of the dollar.
The American currency stands at 1.2230 against the euro and 73.15 against the ruble.
As for crude oil, it also progressed to 48.10 $/b in New York.
However, this morning in pre-opening the firmness dominates on all commodities.
The support comes from the fall of the dollar, but also from a sustained export activity, which should be confirmed by the weekly figures this evening.
From a climatic point of view, there is little cause for concern at the moment other than questions about the impact of the water deficit of recent weeks on soybean production in Brazil.
Weather maps look to be bringing a beautiful white Christmas to the US’ north-east, though we’re not sure if Santa’s bringing vaccines on his round this year or leaving that to medical workers
South American weather maps have seen more moisture continue to fill in across the runs for the holiday window, with fairly widespread forecasts for more than 100 millimetres over much of Mato Grosso and Goais, and more optimism hitting the markets as the models swing toward the wetter side.
Russian weather forecasts are not looking any wetter, with light moisture into next week but no widespread accumulation.
Mild temperatures are helping hold up conditions currently, although also eating up the snow cover in central Russia.
Russia’s now official introduction of export taxes of 25 €/t of wheat from 15 February is causing discontent among Russian producers who will mainly feel the impact of these decisions.
Black Sea cash markets continue to trade around this new export tax in Russia, with more support in bids for both EU and Ukrainian origination programs, and trying to chase out more wheat, mostly unsuccessfully.
Lots of chatter has been going around about how much wheat Russian farmers have sold in recent days, and anyone looking to cover domestically there has had to hold up bids with very little sold at new values that factor in an export tax cost.
In this context, the Moscow Stock Exchange (Moex) is about to launch a futures contract for wheat with the following specifications :
– The contract will be for be a class 4 wheat according to Russian standards, or wheat containing at least 12.5% protein;
– Lot of 25 tonnes;
– Place of delivery: one of the three selected silos located in the Voronezh region in the central district of Russia;
– This futures contract will offer three delivery dates per campaign: September, December and March;
– The deposit should amount to 15% of the contract value.
The launch is planned before the end of the year.
Australia cash markets dropped AU$1-$2/t on wheat, while contract bids remained relatively unchanged.
We saw liquidity in South Australia and Western Australia go through on the online exchange platforms.
The January 2021 ASX wheat contract also traded lower throughout the day, going through at around $285/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.
The Aussie government has finally brought a WTO complaint about the China/barley situation; not something that is likely to bring any near term resolution to the situation though.
China remains the key buyer at the moment on the international scene, and the question is whether this momentum will remain as strong in the first half of 2021 as it has been in recent months.
On the international trade scene, Tunisia bought about 117 000 t of milling wheat, 100 000 t of durum wheat and 100 000 t of feed barley.
Thailand is also reported to have bought about 77,000 tonnes of feed wheat.
However, wheat values eased in overnight trading, while corn and canola posted gains and rapeseed prices rose sharply too.
Soybean crushing activity ranks third among the most active months, which, together with the doubts that remain about the future Brazilian harvest, largely supports the oilseed complex.
So, canola is continuing to grow which, along with the increase in palm oil, has allowed rapeseed prices to rise by around 4 €/t compared to the previous day.
The fall in weekly crude oil stocks in the USA this week also supported vegetable oils.
In this context, the funds were net buyers yesterday for 7,500 lots of corn, while they were net sellers for 3,000 lots of wheat and neutrals for soybean. We will see tonight as will close the session.
