Grain prices had a rough couple of days on Tuesday and Wednesday, taking on heavy losses after USDA released some mostly unsupportive supply and demand data earlier this week.
Thursday’s session proved more optimistic, with corn and soybeans benefiting from some bargain buying and a technical bounce that lifted both grains nearly 1% higher yesterday.
Wheat continued to move lower, in contrast, closing in the red for the third consecutive session.
Weather conditions are still monitored in the US, with icy snowy weather that has been fairly widespread across the central U.S. so far this week, and NOAA’s latest 72-hour cumulative precipitation map shows the chance for more moisture for the Midwest and Plains between Friday and Monday.
NOAA’s 8-to-14-day outlook predicts seasonally cold weather will hang on for another week, with drier-than-normal conditions reemerging in the Plains and western Corn Belt between February 18 and February 24.
In France, the low temperatures cannot be considered as unusual.
The main consequences so far are the freezing of navigation canals in the eastern part of the country, which is disrupting the flow of goods.
One month after the previous cold spell, the Black Sea area is about to experience a similar episode.
A cold front coming from the east of Siberia will progressively arrive in the European part of Russia.
The peak of the cold is expected on Tuesday with temperatures that could tumble until -30°C in the Russian plains (except those of the southern district).
The northern half of Ukraine is expected to be hit by this chilly conditions with minimums expected at around -25°C.
The snow cover in place will protect winter crops.
Consequentially, wheat prices, in faded as traders shrugged off winterkill worries in the main growing areas and were better-than-expected US export sales this past week.
Yesterday’s technical buys, indeed, has partially supported by a good round of export sales, which USDA reported during the morning, where wheat were 0.6Mt, corn were 1.4Mt, beans were 0.8Mt.
There was also 110,000t of new sorghum sales to China.
However, wheat prices remained fairly volatile after having risen consistently between early December and mid-January, with a lot of up-and-down fluctuations after that period, while corn and soybean prices were slightly up erasing somewhat the losses that followed the USDA report of Tuesday.
Rapeseed benefited yesterday from the firmness of canola.
Canadian exports are still very strong, leading to a likely extreme pressure on ending stocks.
No new US sales flashes, or sales cancellations, were reported yesterday and with China in holiday mode little new is expected into next week.
China, indeed, is celebrating the Lunar New Year today, the year of the buffalo.
In add, we espect the business should be subdued today before a long weekend in the US.
Indeed, markets will be closed on Monday for George Washington Day.
Traders, really, are still wary of rising production potential in South America and remain disappointed that domestic stocks aren’t as low as they had previously anticipated.
In fact, Brazil’s national ag agency CONAB has increased soybean harvest that could amount to about 133 Mt.
It also increased its corn production estimate by 3.2Mt to 105.5Mt on a higher safrinha crop, forecasting a greater area would be planted.
Brazilian consultancy Datagro is bracing for an even bigger soybean production for 2021/22.
The group expects Brazilian farmers to plant 2.9% more soybean acres next season, setting the stage for a potential production of 5.187 billion bushels.
This isn’t entirely an unusual change though, as they have a normal tendency to gradually push that figure higher through the first several months of the year.
However, delayed planting remains a concern in many areas with the late bean harvest and slightly wetter forecast runs today.
Argentina’s Bolsa de Comercio de Rosario grain exchange also increased its corn and bean crop estimates, +2.5Mt, +2Mt respectively, after the Jan rains, suggesting most risk is now off the table.
This is despite current dry weather maps.
South Africa’s Crop Estimates Committee released its final production estimates earlier today, which includes a corn tally of 602.3 million bushels.
That’s a big jump over 2019’s harvest, which was for 443.9 million bushels.
On the international market, Turkey has provisionally purchased 235.000 t of corn from optional origins (but likely from Ukraine and/or Russia) in an international tender that closed earlier today.
The grain is for shipment between mid-February and mid-March.
Jordan is still seeking 120.000 t of milling wheat and 120.000 t of barley through on-going tenders that closes February 17.
The grains are for shipment in September and October.
Egypt purchased 30.000 metric tons of soyoil in an international tender that closed earlier today and is for arrival by early April.
On the political hands, yesterday stimulus funding the EU called “Recovery and Resilience Facility”, amounting to €672.5 billion (US815bn), was passed by parliament EU.
Compared with the US the EU plan targets longer term projects with a mix of loans/grants moreso than the US stimulus.
Proposals in the US to make large direct payments specifically to “minority” farms are raising concerns about the disparate impacts this would have on US farmers.
There’s potential for ongoing litigation if future farm bills were to include more such discriminatory clauses.
On the financial hand, in Wall St., the Dow sagged 118 points lower in afternoon trading to 31,319, easing off all-time highs captured yesterday amid a worse-than-expected jobless claims report.
Energy prices also spilled into the red today, with crude oil falling 1% to stay just above $57,80 per barrel in New York..
Diesel also dropped about 1%, with gasoline seeing cuts of around 0.5%.
The dollar moves little at 1.2120 against the euro this morning and 73.80 against the rouble.
