Euronext slipped into the red on Thursday, in the wake of a US market weighed down by profit taking.
US markets, indeed, were slightly down yesterday.
The markets are marking a pause before the weekend, in a context of funds’ profit-taking ahead of next Tuesday’s USDA report.
In fact, Tuesday the 12th we will see the USDA’s next key grain reports – grain stocks and winter wheat acreage estimates.
The sessions were also marked by the announcement of particularly disappointing US international sales last week.
Flashed export sales in the US had 213k of old crop beans to unknown and 130k of new crop beans.
Regular export sales were also out, with dismal bean figures at 37k – “new” china business at 369k was really a mix of cancellations and switches from unknown.
Corn sales at 0.7 MMT and wheat at 275k were about as expected and there was also a set of new crop milo sales (china and unknown both).
Wheat shipments from France were slightly down in December.
China and Algeria were the main destinations.
The strike in Argentinian ports would also be finally over after weeks of blockage, which should allow the country to resume its exports, especially wheat.
Buenos Aires Exchange has revised slightly upwards its wheat crop estimate to 17 Mt compared to last month’s 16.8 Mt.
Also of note, the weather charts anticipate good rains over much of South America over the next 10 days.
Most ideas for beans are in the 47-48 MMT range (vs USDA last WASDE 50 MMT) as planting begins to wrap up
Looking ahead to next week’s reports, surveyed estimates (for what they are worth) are calling for a 35 mbu reduction in bean ending stocks and a 100mbu reduction in corn. Winter wheat acreage ideas have wide ranges but mostly towards a ~200k increase in SRW, ~800k in HRW for a total figure near 31.5 million acres.
Weather maps are still bringing nice moisture across central Russia and eastern Ukraine, with the last models a widespread inch (slightly more in parts of the South).
Aussie weather maps are drying out across NSW and QLD, and final harvest is starting to wrap up across SW Victoria.
The bird flu is expanding in France.
124 poultry farms are now concerned and more than 350 000 ducks have been slaughtered.
Fallout from the US political mess continued with resignations and ongoing calls for impeachment.
From the economic side though, expectations for more dovish stimulus measures after the Georgia election have had a more direct impact and expected inflation ideas are getting revised higher.
Coronavirus vaccines continue to roll out globally – but in the meantime there’s a new lockdown in China after cases spiked again there.
The stronger AUD has been weighing slightly on markets, with local wheat and barley markets relatively unchanged across the boards yesterday. Canola was up another $2-3 on the east coast.
However, these moves down was seen as a technical correction rather than a trend change.
In fact, according to the FAO, the world food commodity price index has increased by 3.1% in 2020. Vegetable oils have progressed the most, with an increase of 19.1% in 2020. The cereal sector, for its part, rose by 6.6% compared to 2019.
The stock markets remain on a positive trend, close to their recent highest levels.
In this context funds, yestarday, were net sellers in 5,500 lots of corn, 12,000 lots of soybeans and 5,500 lots of wheat.
So, Chicago wheat March was down 5,2¢ per bushel to 642.20c;
Kansas wheat March was down 5,0c/b to 598,40c/bu;
Minneapolis wheat March was down 3c to 603.20c;
MATIF wheat March fell 1.50€ to 214,50;
Corn March fell 1c to 494.00c/bu;
Soybeans March was down 4,6c to 1366,40c/bu;
Winnipeg canola March gained C$4.80 to 656.8;
MATIF rapeseed February fell €1.00 to 432.25;
Aussie feed values into Queensland were a touch stronger even as sorghum crop ideas push up after the rains, indeed Sorghum delivered downs about a $305, Wheat $310, Barley $275.
Brent crude February up US$0.08 per barrel to $54.38;
WTI crud February up US$0.20 per barrel to $50.83;
Dow Jones index up 211.13 points to 31.041,13 points;
AUD stronger at $1.290;
CAD stronger at $1.270;
EUR stronger at $1.2270;
RUB stronger at $ 74.36.
Black Sea markets were on holiday with Orthodox Christmas (Merry Christmas to all there) and many will be out again tonight.
