North America markets were closed yesterday for President Day and Family Day holiday.
In pre-opening this morning, prices are upping on all products in the context of climatic risk due to the cold snap in place in USA.
On the other hand, European exchanges were operating yesterday, with values that were firmed.
In fact, on Euronext, wheat prices increased sharply, surging by +4 to +5 €/t on the current crop contracts and by + 1.50 €/t on the next season.
This movement is mainly due Algeria’s OAIC tender which offers are due today.
At this time, however, it’s know very well the tightness of supplies in Europe until the end of the season and so, markets were more higer.
On 14 February, indeed, the European Union has exported 16.25 Mt of soft wheat against 19.53 Mt last year to date.
In barley, the EU has so far exported 4.65 Mt compared to 4.78 Mt last year.
We should start seeing OIAC tender’s unofficial first results out to market into Wednesday/Thursday EU time.
In the meantime, there’s been much discussion about the specific discharge ports limiting overall purchase volume.
The discharge ports are not entirely suitable for larger vessels.
One consequence of restricted vessel size is that it’s beneficial to sellers of nearby origins such as France and other EU sellers, but disadvantageous to distant origins from which ocean freight would only be competitive in bigger vessels.
So, it is not exactly clear what volume will be bought by Algeria, moreover in such a context of firm prices.
Origins are optional, however, it is likely to see the French wheat retained for a good part.
Yesterday’s closing of the American markets, added more uncertainty on operators choise.
The operators, indeed, are expressing fears about the consequences of the intense cold snap in place for several days in the USA.
The cold snap peaked overnight with near zero (0F) temperatures reported all the way down into central Texas and rolling power blackouts catching global attention as electric heating demand spiked in the anomalous weather.
So, winterkill concerns remain topical, though much of the southern Plains now has at least a couple inches of snow providing some insulation.
No surprise ABARES that revised upwards its estimate of wheat production in Australia to a record-high of 33.34 Mt.
Rapeseed prices, instead, are finding support from the strength of canola.
China yesterday were in holiday too, as chinese New Year celebrations will start wrapping up tomorrow with the country starting back to work on Thursday.
On the international scene so, we have seen in add to OIAC’s tender, only a tender by Syria in 200,000 tonnes of milling wheat.
From Black Sea area, figures published by the statistical body of the Russian Federation show that producers made significant sales of wheat during January.
The volume sold by the Russian producers exceeds by more than 25% the volume done in January last year.
This business is clearly explained by the producers’ decision to sell off their stocks before the introduction of export taxes.
Aussie local trade yesterday caught some higher bids for AH2 wheat in southern Australia, amid some near-term shipment demand, but price moves generally were limited.
The soybean, on her hand, is still benefitting from the delays in the Brazilian harvest caused by persisting rains especially in the major region of Mato Grosso.
Near-term weather has been allowing for some pickup in harvest pace, but there’s still a significant backlog of field work to catch up on relative to “normal”.
In add, moisture is again building on the extended run weather outlooks for central Brazilian soybean areas.
We will see how the sessions close tonigth.
