Futures markets fell across the board; there was needed to experience a bearish correction after the sharp increase in prices of recent weeks.
And this is what happened yesterday on the back too of beneficial rains in the US and in South America and after ABARES published estimate the Australian wheat crop at 31.17 Mt vs. 28.91 Mt seen last month.
In the meantime, Russia’s Ag Ministry is talking of potentially increasing the first half 2021 export quota by 2.5 million tonnes, most of which would be wheat.
The current 15Mt quota was not seen as a major constraining factor, but increase would help take off any potential late season pressure.
Infact, australian wheat crop is getting bigger and Black Sea wheat is losing its competitive edge fast in SE Asia, the exports sales to the region tanked a lot in October already.
In the light of the futures board price break today, Egypt’s GASC is tendering for wheat again.
This tender is not surprising after the little volume contracted last week (175.000 t).
Today is first notice day for wheat and corn December contracts.
Fun fact that the oldest long is from mid-2019 for corn.
On the international stage, we can also note the purchase of 400.000 t of milling wheat by Turkey and 120.000 t by Jordan.
Flash sales by the USDA had two sets of unknown corn sales – 140,000t and 204,000t.
Many are assuming these are previously rumoured Chinese demand.
Weekly US inspections had 503,000t of wheat, 2.0Mt of beans, and 900,000t of corn – all about as expected.
Milo/sorghum had four boats to China.
The European Union said that wheat export to third countries between July 1 and November 25 amounted to 9.32 Mt, down from last year to date.
Barley exports have reached 3.07 Mt, 15% lower than in the last marketing year.
In the meantime, corn imports have dropped by -23% to 6.85 Mt.
ABARES pegged too Australia’s barley crop at 11.9Mt, and canola 3.7Mt.
Thanks to the weather pattern La Nina, Australia benefitted from decent rainfall this season contrasting with several previous years of dryness.
As a reminder, Australia has no access to the Chinese market due to prohibitive tariffs.
South American rains remain on the maps, but still well below “average” for central Brazilian soybean areas.
The latest models show some 30pc below average for the states of Goiás and (the northern part of) Mato Grosso across the two week outlooks.
Black Sea weather maps also remain heavily on the dry side.
Moderate temperatures have been helping, but with hard frosts forecast for the Volga and Central Russia winter kill worries are also coming back into play for already-stressed crops.
December 1st officially marks the beginning of the winter season.
This morning, temperatures dropped until -5°C in the Volgograd region, -10°C in the Samara region and -15°C in the eastern region of Orenburg.
In regions with temperatures below -10°C, the crops are covered by a light snow cover of between 5 to 10 cm, which is sufficient to protect them from the cold.
This situation is quite normal for the season.
Australian harvest continues to move along rapidly though we saw some harvest fire ban days put in place over the weekend.
But fire bans, along with some showers of rain, didn’t stop growers for long.
Aussie cash boards were relatively unchanged on wheat through in the north where harvest is albeit finished, while the southern cash bids were a fraction softer by $1-2t.
Barley was also a fraction softer while canola bids showed some strength being up again $3-4/t.
We continue to see small premiums in the wheat market for deferred contract bids versus the off-the-header harvest bids.
