In Chicago, only corn rose yesterday, as know mainly as a result of the downward revision of US production, posted Tuesday evening by the US Ag.
Next Monday will be holiday in the US, and CBOT/Minneapolis will be closed after Friday’s regular session and re-open for Monday’s night session.
So, soybeans suffered some profit taking after the sharp rise in recent days, while corn is at its highest for 7.5 years.
In fact, the markets once again displayed great volatility yesterday with a strong start to the day, in line with the day before, before wiping out part of their gains at the end of the session.
In addiction, it should be noted that the crossing on Euronext of the threshold of 200 € / t on the 2021 harvest deadlines gave producers the opportunity to mark selling prices and this led the prices for the 2021 harvest to fall below this psychological threshold.
In the meantime, however, other news also came.
Rosario Stock Exchange revised slightly upward its wheat harvest estimate to 17 million tonnes against 16.5 previously posted.
The stock exchange estimates maize production at 47 million and soybean production at 46 million tonnes.
Brazil’s CONAB pegged soybean production there at 133.7 million tonnes (Mt), down 0.75Mt after the recent weather – current maps remain good for most of Brazil and now, operators will closely monitor sowing conditions in Brazil also for the second harvest behind soybeans.
Talk has surfaced about a potential merger between France’s Invivo and Soufflet, which would further consolidate the cash markets there but, avian influenza is back in the news with the culls in India and a new announcement today about culls in Germany – though not expected to be widespread.
And more, in its monthly report, France Agency yesterday revised upwards its third country wheat exports to 7.27 million tonnes against 7.09 estimated last month.
However, we have seen a slight downward revision of intra-community exports so, the end stock is showing little change at 2,485 million tonnes against 2,498 last month.
Obviusly, this confirms a tight end of season stock, in fact, last year the end stock stood at just over 3 million tonnes, but we must note, that England is now considered as a third country and not intra-community.
On the corn hand, France Agency posted an end stock at 1,860 million tonnes against 1,893 last month, while in barley posted at 1,067 million against 1,158 last month.
Corona cases continue to jump globally, even as more vaccine doses roll out and Johnson and Johnson’s new vaccine approaches expected approval.
However, markets continue to price in some recovery into the year, but back of mind concerns remain as we slowly tick forward in the calendar without massive changes to the situation.
US politics is still in a mess with the attempt to impeach Trump, but on the economic side politicians have started pushing once again for a new stimulus measure – with headline comments from Democratic politicians aiming over US1.3 trillion.
And even if US ethanol production was reported at 941,000 barrels per day (bpd), so in up 6,000 from last week, stocks continue to build, to 23.7 million.
The value of RIN ( Renewable Identification Number) credit, in fact, remains weaker, and even if firmed corn market, with expectations about more blending waivers to come in the last few days of the Trump presidency, was kept pressure on margins.
In addiction, the situation remains unclear on the export restriction measures both in Argentina on corn and in Russia on several products.
In fact, doubt remains as to an increase in these wheat export taxes for the period from February 15 to June 30, with proposals last night from the Ag Ministry to take it up by 20 euros.
Markets are expecting most of this tax increase to flow through to the FOB side with little impact to the interior Russian prices, despite that being the goal of the ag ministry.
And in fact, cash markets in the Black Sea region are up strongly again, both the tax and board strength helping, with some $10+/t reported on the offer side.
Aussie wheat markets were up $7-10/t too with a few zones showing even firmer moves in WA/SA.
However, on current price levels, we can also see a certain reluctance on the part of buyers to come forward, like for exemple Egypt, which canceled its call for tenders.
Internationally, yesterday the USA sold 464,300 t of soybeans to an undisclosed destination: 396,000t of old crop soybeans and one boat of new season.
This raising some questions about which parties in the market are interested in taking on new shorts.
In this turmoil context, the CME increased its collateral deposits also due to elevated trade on its market and as a result of the increase in commodity price volatility.
Funds, in fact, were net buyers yesterday for 20,000 lots of corn, but net sellers for 8,000 lots of soybeans and 4,500 lots of wheat and and we have seen the following market prices:
Chicago wheat Mar down US4.5 cents per bushel to 660.5c;
Kansas wheat Mar up 3.25c/bu to 625.75c;
Minneapolis wheat Mar up 8c/bu to 628.75c;
MATIF wheat Marc up €2.25/t to €226.75;
Corn Mar up 7.25c/bu to 524.5c;
Soybeans Mar down 12c/bu to 1406.25c;
Winnipeg canola Mar down C$2.20/t to $684.70;
MATIF rapeseed Feb up €0.75/t to €442.25;
The US dollar index firmed from 90 to 90.3.
The dollar evolves little against the euro at 1.2150 and against the ruble at 73.65.
Oil also consolidates at 52.80 usd / barrel.