Yesterday’s announcement from the Argentinean authorities to limit corn exports is adding to the current market tightness.
US corn should face an increase in demand.
Argentina is seeking to curb the rise in prices on its domestic market and to secure volumes with the prospect of a smaller harvest than expected in 2020.
Dry conditions will need to be monitored at the beginning of 2021.
Already supported by significant funds’ purchases, prices in Chicago rose again yesterday.
Corn and soybean prices, which have already been strong for several consecutive trading sessions, recorded further progress to deal on new highs.
Wheat prices, which have been less bullish so far, rebounded sharply yesterday.
The March 2021 expiry of the SRW wheat reached a new high in Chicago, now trading above $6.38 per bushel.
In fact, the main Chicago-listed wheat contract surged on Wednesday, catching up with the good performance of corn and soybean prices in recent days.
Partly because of the weakness of the dollar (at its lowest for more than two and a half years) which favors American exports, but also because of technical factors, the price rose by 3.59%.
So, inaspectatly, In a sluggish end-of-year session wheat has caught up with the gains corn and soybeans have made in recent days.
In fact, even though the price of wheat is at highs for more than five years, it was been lagging behind, and now is aligning with other grains.
Corn was not to be outdone, climbing 1.82%, with speculative funds positioning themselves for next year.
Another factor of the increase is that, Argentina , a large producer, is putting an end to its exports of the old harvest.
The soy started the session lower after the news of the end of the strike in Argentine ports blocking more than one hundred agricultural export cargo.
A wage agreement was reached on the night of Tuesday to Wednesday (European time) in Argentinian ports between the dockworkers’ unions and the chamber of the Argentine edible oil industry after a three-week strike.
But the price of oilseeds recovered (+ 0.63%) at the end of the session.
In fact, rumors of Chinese purchases have indeed restarted the upward trend, while dry conditions in South America continue to worry during this planting period.
Of note, however, U.S. ethanol production fell by 42,000 barrels per day last week to 934,000 barrels, while inventories continued to rise to their highest level since March – May 15 (23.5 million barrels).
So, unlike cereals, rapeseed for its part suffered some profit taking and ended the session in the red.
However, the oil market is still tight, as evidenced by the sharp rebound of the Malaysian palm to its highest level in nearly nine years on the Kuala Lumpur stock exchange.
Also the European market yestarday confirmed its good momentum by signing new gains despite a strengthening of the eurodollar parity.
In particular, the close corn contract stood out, soaring by € 12 / t a few days before its term (January 5).
In fact, in addition to reduced intra-community availability, the seed is currently benefiting from the rapid rise in prices across the Atlantic.
So, on Euronext, wheat and corn prices recorded another increase.
The bullish trend on the US market added to subdued sales from producers contributed to this performance.
So, in this end of year Euronext prices are on highest levels too since the harvest, close to levels seen in summer 2018 and import countries are facing this surge in prices.
In fact as exemple, in its last tender, Algeria bought about 300.000 tonnes of wheat between 291/292 $/t.
As a reminder in November, Algeria contracted a larger volume at 274/275 $/t.
Markets will be open only for half-a-day today and will remain closed tomorrow for the New Year.
Return to normal as of next Monday.
Today session, is confirming this bullish trend especially on mais and soybean, and maybe we will see close the year still with firming prices.
At this moment [31/12/2020 14:11 (GMT+1)], on CME a bushel of wheat (about 27 kg) for delivery in March ended at $ 6.3525 from $ 6.4075 on Wednesday, down 5.50 (¢/b).
The bushel of corn (about 25 kg) for delivery in March ended at 4.8000 dollars against 4.7450 dollars the day before, up 5,50 (¢/b).
A bushel of soybeans (about 27 kg) for January delivery ended at $ 13.1750 from $ 13.0375 at the last close, gaining 13.75 (¢/b).
On Euronext , a tonne of common wheat is upping 0.25 euros on the March expiry at 213.25 euros and 0.25 euros on that of May at 210,50 euros.
A tonne of corn , is increasing by 6.00 euros on the January expiry to 219 euros, and by 2,00 euros on the March expiry at 198.50 euros.
We will see on the our next edition that will be published on January 4, the final results.
No Italian evening edition today.
