After an euphoric start to the year, Euronext ended Wednesday’s session in disarray.
The cereal prices, in fact, decreased a little yesterday at the end of the day, marking a pause in the strong progression observed for the last few days.
The wheat prices on Euronext March contract came to test a resistance level between 219 and 220 €/t before falling back on profit-taking.
Wheat, is consolidating after its nice gains recorded in recent days.
In addiction, the fodder sector has come under pressure due to cases of avian flu in France.
In order to contain the contagion, 200,000 poultry have been slaughtered, and 200,000 additional animals should follow.
However, rapeseed and corn remain in the green in the face of an American market which is amplifying its gains and increasingly tense fundamentals.
So, corn prices showed little movement, shared between declining global stocks and a bird flu outbreak spreading across western Europe.
Meanwhile, rapeseed, remained in the spotlight, still benefiting from positive fundamentals and a tightening oilseed complex.
In fact, the Malaysian palm has notably jumped forward again in anticipation of the next MPOB report, in which the local consensus anticipates a melting of national stocks to the lowest since June 2007!
Across the Atlantic, US Democrats on Wednesday completed a sweep of the two U.S. Senate seats up for grabs in runoff elections in the state of Georgia, giving the party control of the chamber and boosting the prospects for President-elect Joe Biden’s ambitious legislative agenda.
However, the supporters of Donald Trump organized demonstrations on Capitol Hill disrupting the presidential confirmation of Joe Biden.
Protesters rallied to support President Trump, protesting that Trump was the winner. Things took a nasty turn whilst the law-makers convened to certify Biden’s election win
With drawn guns and teargas, police sought to clear the U.S. Capitol building of hundreds of protesters who stormed the building.
Members of the House of Representatives and the Senate were evacuated after pro-Trump protesters surged through the halls of Congress, forcing both chambers to suspend deliberations.
In this context, US soybeans continue to make significant gains in the face of sustained international demand and the start of the Brazilian harvest which is worrying.
The market is also anticipating a cut in South American soybean production in the next USDA report, as well as a reduction in US carry-out stocks.
Tension over soybeans so, remains high due to fell Brazilian soybean harvest, expected at around 130 Mt.
Chinese demand remains the driver of this rise, with imports this year expected to be around 100 Mt.
Maize, meanwhile, has grabbed some additional gains in the face of an increasingly tense situation in Argentina.
Farmer strikes in Argentina, in retaliation to the the government’s corn-export suspension, continues to create concern around Argentina’s ability to meet the market demands.
There still remains a backlog of more than 100 vessels from the recent port strike as well
The farmers have indeed decided to suspend their grain marketing for three days in order to protest against the suspension of exports.
In addictio, the CNGOIC (Chinese National Grains and Oilseeds Information Center) has also raised from 8 Mt, to 15 Mt, its estimate of corn imports for the current campaign!
So, corn futures followed the strength in beans, hitting session highs above $5/bu, before settling off the highs in the middle of the daily range.
It was the 15th positive day out of the last 16 trading sessions.
Wheat was lower.
In fact, traders are showing some caution and possible profit-taking ahead of Tuesday’s USDA’s next key grain reports – grain stocks and winter wheat acreage estimates.
Aussie markets continued to firm across the boards yesterday, with strength upwards $5-6/mt on wheat.
Canola was also up on the grower boards by $5/mt with track values along the east coast around $610/mt.
Through the markets across most of the port zones we continue to see selling activity, there was some decent volume traded yesterday.
Black Sea market are closed today for Orthodox Christmas.
The key elements of support remain the same, between export restrictions in Russia and Argentina on the one hand, and international demand mainly from China on the other.
On the meteorological side, there are few fears for the moment in the Black Sea basin, with snow cover present over Russia in the areas where the drop in temperatures is awaited.
In this context of tension, the dollar decreased again vs the euro, posted this morning at 1.2330.
The dollar remains stable against the ruble, at 74.10.
The crude oil continues its progression to 51.00 $/b on New York, especially in a context of falling stocks in the USA and the cut of production by 1 Mbpd decided by Saudi Arabia during the OPEP meeting on Monday and Tuesday.
The palm fell back slightly this morning on profit-taking.
Funds were net buyers yesterday for 12,500 lots of corn and 12,500 lots of soybeans. However, they were net sellers for 5,000 lots of wheat.
