Corn, soybeans and wheat all saw double-digit rises yesterday on a “bullish basket” of supply and demand fundamentals, including winterkill worries for the U.S. wheat crop, dwindling domestic supplies and a slower-than-normal harvest pace in South America.
However, the main market-moving news overnight, was winter kill damage and risk in US Hard Red Winter (HRW) and western Soft Red Winter (SRW) wheat areas after the recent cold snap.
In this context, corn closed up nearly 2.5%, with soybeans firming around 1% and some wheat contracts jumping more than 3.5% higher.
Energy futures also trended higher, with crude oil up another 1% to clear above $60 per barrel.
Diesel rose more than 2%, with gasoline jumping more than 4% higher this afternoon.
Plentiful subzero weather has done a good job feeding the demand bulls throughout February.
The weekly US export inspections, a day delayed with the holiday, reported no real surprises 393,000t wheat, 1.3 million tonnes corn and 800,000t beans, slightly weaker than some expectations but not out of ballpark.
There was also 70,000t milo/sorghum, all to China.
In fact, corn export inspections fell 17% week-over-week for the week ending February 11, also soybean export inspections were lackluster this past week, eroding 57% lower, wheat export inspections eased 13% lower.
However, tight domestic supplies still have some traders feeling bullish, and spillover strength from surging wheat prices lent additional support yesterday, especially on corn.
In the meantime, traders are keeping a watchful eye on harvest in Brazil, which has gotten off to a relatively sluggish start so far.
Private guesses in the low 10pc range as of last night, but still well below half of “normal” by this point.
Similar delays are continuing for safrinha corn planting, following beans, keeping the spectre of yield drag ever present.
Yesterday, US National Oilseed Processors Association (NOPA) soybean crush figures for January were 184.6 million bushels, slightly above expectations and a January crush record.
Bean oil stocks were also above expectations though, at 1.799 billion lbs.
Also European wheat prices closed higher yesterday after worries over the U.S. cold snap led to some technical buying.
In fact, MATIF wheat contract for March, was up €2/t, closing to €230.50/t.
However, EU wheat production is not currently under the same winterkill damage threat as the U.S., as some key areas are enjoying ample snow cover to protect the crops there from overly cold temperatures.
Indeed, speaking of winter kill, Russian and Ukrainian weather maps are holding fairly steady into the next two weeks with no new immediate concerns and a fair amount of snow still across the coldest winter wheat areas.
State Russian consultancy expects the country’s 2021 wheat crop to increase by more than 1 million ton versus its prior estimates, reaching 78 million ton, citing improving weather conditions.
Russia is the world’s No. 1 wheat exporter.
The Ukrainian state statistics agency has pegged winter wheat planted acreage at 6.7mha and barley at 1.1mha, both up about 10pc from prior AgMinistry figures.
Also Aussie local markets firmed yesterday with the stronger overnight opens on CBOT.
Some east coast wheat and barley values lifted $5/t higher, higher bids finally emerging after last week’s weaker trend.
ASX east coast wheat nearby futures, rising about $4/t, followed the local cash market, with some spread trading on the front end as March delivery approaches. The January 2022 contract saw a little action, pushing up $1/t to $306/t.
On International scene, Japan issued a regular tender to purchase 82.393 t of food-quality wheat from the United States, which closes later this week.
Several types of wheat are being sought, including western white, hard red winter and dark northern spring wheat.
The grain is for shipment between March 21 and April 20.
The Philippines issued a tender to purchase 145.000 t of milling and animal feed wheat that closes tomorrow.
More details were not immediately available.
No word yet on Algeria’s OAIC (Office Algérien Interprofessionnel des Céréales) wheat tender results.
Markets are still comfortable that there will be a fair chunk of French in the mix.
Jordanian barley tender from the other day, for Sep/Oct shipment, was cancelled and is set to re-run again next week.
