Despite some intraday volatility, little change has been observed on cereals prices yesterday.
In fact, whipsaw markets into Monday US trade saw oil sell off hard on the overnights with a stronger dollar and COVID worries, only to pull back up into the day session as optimism returned and US stimulus worries were resolved.
Only the soybean continues to perform well on the back of fears about the next production potential in Brazil.
Beans were up another 2pc and continued to support the overall grains complex.
Also, the strike by Argentinian dockworkers since 9 December is blocking almost all exports from this country, and no resolution is expected for at least a few days.
One estimate had soymeal exports to date at only 25% of committed/sold volumes for the month (with the shutdowns stopping exports).
Soybean export inspections in the USA amounted to 2.5 Mt, a rise of more than 3% compared to last week.
So, reduced supplies of soybean before the arrival of the Brazilian crop continue to push prices up and on short-end, availabilities are also curbed by the current dockworkers strike in Argentina.
Wheat and corn prices were stable.
In fact, US export sales was 391,000t for wheat, and 763,000t for corn, with no real surprises to be seen in there.
However, still no flashes, and nothing about the rumored Chinese wheat sales the other week, although the bulls are taking a little hope in the possibility that they did happen, but below flash-reporting levels.
Instead, There were two boats of sorghum loaded to China, again as
expected.
In the Old Continent, on 20 December the EU, including Great Britain, exported 12.08 Mt of soft wheat, compared with 14.5 Mt last year to date.
Barley exports amounted to 3.58 Mt compared to 3.91 Mt last year.
Imports of corn also fell to 7.91 Mt compared to 10.40 Mt last year.
From an economic point of view, the Brexit negotiations focus the attention.
Consequences of a no-deal would be high both for the UK and the EU.
But, for the moment, these uncertainties do not prevent the euro from casual performing against the dollar, being as little down at 1,2173.
The rouble, on the other hand, is slight up at 75.15 against the green back.
In Russia, export taxes are not due to come into force before 15 February.
However, the consequences are already visible as customs are delaying the issue of the required export certificates.
As a result, FOB Russian prices are increasing significantly, while, cash markets across the EU and Ukraine have seen a slow start to the Christmas week, but so little, that no easing reported in the real physical side.
In this context, yesterday, a meeting was held between members of the Ministry of Economic Development and the main agricultural associations Ucraine.
This ministry had steers agricultural policy in the Ucraina for two year and more.
Livestock farmers asked to limit corn exports following a poor harvest, but the ministry ensured participants, especially the exporters, that no further measures would be taken to limit grain exports.
As a result, only the usual 1 July memorandum between the ministry and the exporters’ association on 17.5 Mt of wheat remains in force.
It should be noted that a law adopted by the Rada to reduce VAT from 20% to 14% for a range of agricultural products is waiting for the President’s approval and will come into force as soon as it is signed and will result in a drop in commodity products on the domestic market.
On the weather market, forecasts for the Black Sea have added a little bit more precipitation for central Russia and the northern Volga, but not in the south.
Forecast temperatures remain very warm into the New Year too.
The World Trade Organization confirmed yesterday that they received the Australian Government’s complaint about China and its barley tariff; there is now a two-month window for discussion before the WTO officially starts a hearing.
In this context, yesterday, funds were net buyers in 8 000 lots of corn, 17 500 lots of soybean and 2 500 lots of wheat.
This morning we are seeing a number of technical sales, especially on wheat, we will see how it will close the session.
Oil is showing little change at 47.74 $/barrel in New York.
