Following Friday’s sharp bearish correction, corn, soybeans and wheat all trended significantly higher to start this week.
Euronext had started its session in the red, before giving itself a clear bullish start in the second half of the day, in the wake of a new outbreak in Chicago.
The US markets have indeed jumped forward after the announcement of particularly dynamic weekly inspections in US ports last week.
The financial funds’ activity, obviusly, remains essential for prices’ evolution.
So, the prices of the soybean thus rose by nearly 3% when Euronext closed, and brought with them the prices of Canadian canola and Euronext rapeseed.
Corn prices, instead, closed around 2.25% higher, as did most wheat contracts.
Wheat prices, in fact, followed corn and soybean prices higher.
Corn export inspections, indeed, moved 52% above the prior week’s volume to reach 54.8 million bushels.
That was higher than all trade estimates, which ranged between 35.4 million and 45.3 million bushels.
Japan led all destinations, with 20.4 million bushels. Cumulative totals for the 2020/21 marketing year are now 84% above last year’s pace, with 737.6 million bushels.
Despite soybean export inspections retreated slightly week-over-week, sliding to 72.7 million bushels, Still, that was on the high end of trade estimates, which ranged between 36.7 million and 77.2 million bushels.
China once again accounted for more than half of the weekly total, with 44.8 million bushels.
Cumulative totals for the 2020/21 marketing year are still far outstripping last year’s pace, with 1.664 billion bushels.
Wheat export inspections nearly doubled week-over-week, moving to a total volume of 19.3 million bushels.
That was also better than all trade estimates, which ranged between 7.3 million and 14.7 million bushels.
Japan was the No. 1 destination, with 4.2 million bushels.
However, cumulative wheat totals for the 2020/21 marketing year are still slightly behind last year’s pace, with a total of 591.5 million bushels since June 1.
About the weather conditions, in Black Sea area temperatures have increased significantly leading to the disappearance of the snow layer in many places.
However, it could leave the crops unprotected against the frost in case of another cold snap.
Wheat crop ratings in Kansas are deteriorating with 43% of “good to excellent” compared to 46% last month.
So, March Chicago SRW wheat futures rose 14.5 cents to $6.49, March Kansas City HRW wheat futures added 13.75 cents to $6.27, and March MGEX spring wheat futures climbed 14 cents to $6.2650.
MATIF wheat March contract up €3.25/t to €226.50/t.
Corn March futures climbed 11 cents to $5.1150, with May futures up 11.25 cents to $5.1425.
Soybean March futures rose 34.5 cents to $13.46, while May futures gained 33.5 cents to $13.4525.
MATIF rapeseed February contract up €4.75/t to €437.
The rapeseed benefitted from the rebound of canola (+4.5%).
In fact, Winnipeg canola March contract up C$26.10/t to $675.70.
The palm was also rising despite of exports’ fall.
However, traders remain wary of favorable weather in South America that is still expected to help generate a record soybean harvest this season.
Recent rains in Argentina are easing a bit the hydric deficit of last weeks.
Also, the activity in the ports is resuming after the recent strikes that penalized shipments.
South Africa is expected to plant 7% more corn acres this season due to higher prices and generally favorable weather.
The country’s total corn footprint is expected to reach 6.87 million acres, per its Crop Estimates Committee.
Ukraine’s economy ministry and agricultural unions agreed to limit 2020/21 corn exports to 24 MMT, until next June 30, a sufficiently high ceiling so as not to impose constraints on national exports, in an attempt to stabilize domestic feed prices.
The groups agreed there is enough corn to fulfill both local consumption and export demand this marketing year.
This figure is also in line with the export target given to Ukraine by the USDA. To date, more than 10.5Mt have been shipped.
China is now the main destination of Ukrainian exports before the EU.
About the European Union, yesterday imports-export data were released.
Imports corn lagging 26% lower year-over-year after reaching 372 million bushels through January 24, according to data by the European Commission.
European Union soybean imports are trending slightly higher year-over-year after reaching 305.7 million bushels through January 24.
EU soymeal imports are trending moderately lower from a year ago, in contrast.
In this weekly report, the European Commission has also only increased by 860 kt the cumulative Community import of rapeseed / canola since the start of the season, to 3.9 Mt, against 4.1 Mt last year.
European Union soft wheat exports for the 2020/21 marketing year have reached 532.8 million bushels through January 24, which is down nearly 16% from last year’s pace.
EU barley exports are also trending lower year-over-year, with 177.3 million bushels during the same period.
Just a note: since January 1, the European Commission is no longer including Britain in these reports, reflecting the country’s departure from the EU.
On the international scene, Taiwan issued a tender to purchase 85 000 t of grade 1 milling wheat from the United States that closes on Friday.
The grain is for shipment between late March and late April.
Algeria issued a tender to purchase at least 1.8 million bushels of milling wheat from optional origins, which closes on Wednesday.
The country often buys more than the nominal amount listed.
France and Argentina are in a good position to get the main share in this tender.
So, the Chinese demand, of course, remains a key factor for future prices’ evolution.
In this respect, the return of Covid-19 cases in China is raising fears.
In the mean time, China sold 147.9 million bushels of its state reserves of wheat at auction last week, which was virtually all (99.9%) that was offered for sale.
China has offered seven other similarly sized wheat auctions since the beginning of December in an effort to stabilize rising feed prices.
On the financial hand, Wall St., stocks were mixed, with the Dow trending 112 points lower in afternoon trading to 30,884, while the S&P 500 and Nasdaq made modest inroads to start the week.
Energy futures firmed, with crude oil up US$ 0.50 per barrel yesterday to $52.77 per barrel, while diesel and gasoline rose nearly 1%.
The Dollar is progressing a bit vs. Euro at 1.2130.
The rouble remains weak at 75.60.
Tonight we will see how the sessions close.
