The clear bullish rally recorded by cereals and by oilseed complex showed the first signs of exhaustion after a session with little information.
Wheat futures indeed closed mostly 1pc lower.
Corn prices have not benefited from any news to fuel a new bullish session despite still tense fundamentals so fell too.
US soybeans was also weighed down by profit taking after the soaring recorded in recent weeks.
Winnipeg canola was down 2pc.
Rapeseed for its part suffered the most significant losses during the session and has now fallen by nearly € 15 / t over the last five sessions.
And Malaysian palm too notably pulls all the oilseed complex down due to a slowdown in national exports.
However, we must note that the fundamentals have hardly changed, namely a tense global situation for the 2020/2021 campaign, but with prospects of abundant harvests for the time being for the next campaign.
As mentioned the other day, ideas continue to trend up slightly for South American crops with more private estimates pushing up overnight.
In fact, weather maps still fairly dry for Argentina but overall accumulation expected to be enough to help keep the crops moving.
In general, crops in the Black Sea area from Romania to Russia via Ukraine are in good conditions and suggest good levels of production.
The cold spell that has been in place since the end of last week is losing its intensity.
However, despite temperature that has dropped to very low levels, damage to crops should remain limited as snow has covered the plains.
Aussie weather maps are turning wet again for SA and Vic, with the BOM models strengthening the outlooks for the storm event into later next week.
So, after these rains we continue to see higer Australia’s sorghum forecast, with boosting planted acres massively.
On the international scene, Algeria has bought a volume close to 400,000 t on an estimated price of between 313 and 314 $/t delivered, i.e. about 20 $ more expensive of its last purchase at the end of December.
Jordan has also bought 120,000 t of hard quality wheat with optional origins.
Taiwan finally bought 65,000 t of corn of US origin.
Turkey extended its ongoing wheat tender to include white wheat.
In theory that opens up some more supply origins, though at these prices and given freight we don’t see much changing there.
They’ve been threatening to cancel over high prices, so we’ll see how that works for them.
On politics hand, with Biden in office some new questions are coming out about the future of the US/China trade deal – despite the big corn purchases they have come nowhere close to reaching commitments for ag purchases for the last year.
However, China remains always a major player in all product with an increase in imports of soybean of more than 52% in 2020 compared to 2019.
Tyson Foods has been hit with a near quarter-billion-dollar settlement for price fixing and antitrust activity in the poultry industry.
And, even if the EPA ended up granting some more blending waivers to US refineries mid-day yesterday (late evening in the US), were not as many as some had expected (45 open requests still outstanding).
In fact, reported volumes work out to maybe only 200 million gallons of ethanol.
So, corn remains supported only by the prospect of the USDA raising its export estimates for next month.
Wheat is finding support only in Russia’s policy of export restrictions.
New strikes could turn in play in Argentina again – this time with truckers.
Brazilian trucker strikes are also still expected to start up in a week there.
Operators are likely to remain somewhat wait-and-see and cautious before the Ukrainian authorities decide whether or not to introduce an export quota.
Consequentially, Euronext fell heavily into the red under the weight of profit taking.
The funds were still net sellers in Chicago, respectively for 9,000 lots of corn, 10,000 lots of soybeans and 3,500 lots of wheat.
Aussie local markets took a breather across the south yesterday with wheat a buck or two weaker.
The dollar this morning decreased to 1.2140 against the euro and 73.10 against the ruble.
The crude oil firmed slightly to 53.20 $/b in New York.
So, in this context, are recommended strategies based on more option.
The equity markets, indeed, are increased again despite the global economic context, a consequence of the very accommodating monetary policies with new economic stimulus measures proposed by the new American president that has signed a wave of executive orders following the inauguration, though only a few are economically related.
