Happy holidays from S.W.B. – Sicilian Wheat Bank – La Banca del Grano Spa!
The next Grain & Price Weekly Report will be published on Jan. 9, 2021.
We will continue to publish the other news regularly.
This weekend is marked by extended shipping times to major exporting countries such as Russia and Argentina and new forecast on EU production.
Technical selling following the news that Russia plans to implement a wheat export tax (see below) pressured all wheat futures week-over-week.
In fact, the Russian government has officially imposed a €25.0/MT ($30.6/MT) tax on all wheat exports from Feb. 15 to June 30, 2021 in an effort to stabilize domestic food prices.
But, in Russia, operators report delays in the customs treatment of the country’s wheat exports, raising fears of a taxation of cargoes scheduled to be delivered in December or January, but which would only be from mid-February, date of entry into force of Russian restrictions on grain exports.
The US Agency still expects Russia will export 40.0 MMT of wheat in 2020/21, 16% more than last year and 21% more than the 5-year average, if realized.
As of Dec. 16, total Ukrainian grain exports are down 14% from this time last year at 23.8 MMT, 12.2 MMT of which is wheat.
In October, Ukraine implemented a 17.5 MMT wheat export quota for the 2020/21 marketing year and current sales account for 70% of the quota.
The European Commission revised up its 2020’s wheat production estimation at 116.1 Mt vs. 115.8 Mt seen last month. The corn output has been also increased to 62.5 Mt vs. 60.2 Mt.
But, a French agriculture consultancy, forecasts European Union (EU) soft (non-durum) wheat production will reach 130 MMT in 2021, 9% more than last year on improved planting conditions through fall 2020.
The United Kingdom (UK), not included in the EU forecast, is expected to produce 15.0 MMT of soft wheat next year.
Across the Atlantic there are more questions.
The prolongation of a massive strike movement in the Argentinian ports causes significant delays in the loading of soybeans or derived products from this country.
And more, the Rosario Board of Trade (BCR) forecasts total Argentinian wheat production will fall 15% on the year to 16.5 MMT, the secondlowest output in a decade on extreme drought.
Instead, the Buenos Aires Grain Exchange (BAGE) had predicts production will total 16.9 MMT and US Agency had pegged the 2020/21 harvest at 18.0 MMT.
This week, the export sales of corn, soybean and wheat have all been on the top of traders’ expectations at respectively 1.935 Mt, 1.016 Mt and 561 400 t.
About wheat, 540,000 metric tons (MT) will be for delivery in 2020/21.
Were down by 12% from last week’s 616,000 MT but were within trade expectations of 250,00 MT to 650,000 MT.
Year-to-date U.S. commercial sales now total 19.6 million metric tons (MMT), 10% ahead of last year’s pace.
US Agency forecasts total U.S. wheat exports will reach 26.8 MMT in 2020/21, 2% ahead of last year, if realized.
Nearby Gulf and Pacific Northwest (PNW) export basis for all classes of wheat remained steady on the week as the U.S. grain trade prepares for the upcoming holiday.
Gulf and PNW HRS and HRW export basis for March and forward deliveries fell significantly on the week due to increased elevation availability for those delivery periods.
The Great Lakes – St. Lawrence Seaway System will be closed from early January to mid-March 2021.
So, in this context, the field crop set ended the week on an uptrend due to good international demand and logistical issues mainly on wheat and soybeans, even if, at the end of the session, there were technical selling that pressured all wheat futures.
In fact, CBOT Soft Red Winter (SRW) futures lost 6 cents to close at $6.08/bu.
KCBT Hard Red Winter (HRW) futures fell 12 cents to end at $5.69/bu.
MGE Hard Red Spring (HRS) futures lost 1 cent to close at $5.68/bu.
Instead, Euronext Wheat was up 1.25 euros on the March deadline to 208.50 euros/t.
However, the persistant dry weather over South America has supported international corn and soybean prices.
Thus, soybeans reached one of its highest level for 6 years on the Chicago market on Friday.
On the oilseeds front, soybean prices in the United States crossed an important psychological threshold ($12/b), and those of canola (GM rapeseed mainly produced in Canada) were at their highest for seven years, while those of the United States.
Palm oil continue to grow.
In fact, CBOT corn futures gained 14 cents to end at $4.37/bu.
CBOT March soybean futures jumped 58 cents to close at $12.24/bu.
Euronext rapeseed rose by 0.25 euros on the February deadline to 413.25 euros/t.
Euronext corn rose by 1.00 euros on the January deadline to 193.75 euros/t.
The crude oil in NY is dealing at 49.10 $/b, its highest level for last 9 months.
The Dollar remains weak against most of currencies.
The greenback is dealing at 1.2259 vs. Euro and 73.37 vs. Rouble.
The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials like grains, coal and iron ore, increased 7% on the week to end at 1,301.
The U.S. Dollar Index fell from last week’s 90.98 to close at 90.02.
