Futures markets fell.
This is what happened yesterday on the back of beneficial rains in the US and in South America.
The funds took profits on very long positions.
However, the fundamentals have not really changed, but it is classic as the end of the year approaches to see the market show an opposite trend to the previous months.
At this time, the funds regularly take profits on their positions.
So, yesterday the funds were still net sellers on 15,000 lots of corn, 7,000 lots of soybeans and 5,500 lots of wheat.
In truth, market needed to experience a bearish correction after the sharp increase in prices of recent weeks.
But, December could show even more volatility as the end of the year approaches, mainly in the financial markets, as the physical market is less prone to capital flows.
The main element on the financial markets was the strength of the euro, which stood at 1.2080 against the dollar this morning.
The dollar remains down against the ruble at 75.70.
December deliveries saw a poison pill hit CBOT, with 100 lots of 2 vomi spring wheat issued.
And Vomitoxin is a bad news.
The latest on the coronavirus vaccine situation has seen both Pfizer and Moderna file for “emergency use authorization” for their vaccines.
Meetings are set for next week and the following, implying that the drug may begin being issued before Christmas.
On the Black Sea basin, the arrival of winter and cold temperatures are not currently raising any fears; this situation is quite normal for the season.
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.
But the ongoing dry weather and dry forecasts, in some area Black Sea, has seen Russia’s state Hydromet peg poor-rated crops there at 22pc of total acreage, the highest in a number of years.
Infact, last week, the statal Agro-Meteorological Service reported that 4.28 Mha of the winter sowing area, are in poor growing conditions and 2.42 Mha of the winter sowing area, has not emerged from the ground.
This situation had not been seen in the last 20 years.
So, the areas with crops in good conditions is under 50%, that usually reaches 65% at the beginning of winter.
However, Russian private analysts remain confident for the moment, envisaging a 2021 wheat harvest above 75 Mt, notably thanks to the increase in surface areas.
Canadian Agency’s crop production report is due out on Thursday 3 December.
It is not normally a big factor for markets unless there’s a big surprise.
Ideas are generally for an increase in cereals (wheat, specially for durum) and a reduction in canola.
Egypt bought another small volume of wheat yesterday, 170,000 t, of which 110,000 t of Russian origin and 60,000 t of Ukrainian origin.
This tender had not surprised after the little volume contracted last week.
So, GASC saw three boats booked (two Russian, one Ukrainian) at a ~US$275/t C&F.
Values were roughly in line with expectations.
Probably a new short-term tender will be issued given their needs.
On the international stage, Japan, is buying around 127.000 t of milling wheat from the USA, Canada and Australia.
Ongoing Argentine port strikes saw last night yet another failure to meet agreement, which put a halt to loadings once again at some terminals.
Some crush plants have also been impacted.
South American weather maps have pushed slightly more moisture across the outlooks for central Brazil into next week.
Though it’s still below normal, it is trending up slightly in terms of total accumulation.
Some private crop estimates are starting to push back up.
Broker StoneX, infact, has estimated soybean production for Brazil at 133.9 Mt, while other analysts believe that recent rains are still insufficient to break the 130 Mt level.
So, rapeseed prices are following the decline in vegetable oil prices, whether in palm or soybean.
Crude oil is in slight decline this morning at 44.20 $/b in New York.
However, canola prices in Canada rose yesterday, which could limit the decline potential in rapeseed prices.
Australian Agriculture Agency, which this Monday posted a wheat production estimate of 31.17 Mt for Australia, confirms a harvest close to the 2016 record of 31.8 Mt.
Aussie cash wheat and canola bid prices at east coast sites and SA port zones, down $4-5/t. Canola also was down $5/t while barley was relatively unchanged yesterday.
Bids and offers in wheat and barley trade markets remained wide.
South Australian growers had a slow start to the morning with showery, cold weather but most should be back on paddocks tomorrow.
WA harvest conditions in the past 2-3 days have been sluggish in the Esperance region with rain delays.
