EU Grains Post Weekly Losses
"UK old crop wheat market recorded marginal declines last week mainly driven by further currency volatility, while the domestic new crop market showed small increases on the week," said the HGCA.
"From a global perspective, US grain markets closed up on the week, driven by a combination of factors including strong bioethanol demand for maize," they added.
EU corn stocks for the end of the season, at 9.9 MMT, were pegged at the lowest in over nine years by the EU Commission, they noted. This is viewed as supportive for EU wheat prices.
Saudi Arabia bought 1.5 MMT of feed barley in a tender for shipment between March and May.
Strategie Grains cut their monthly estimate for 2017/18 EU rapeseed production by just over 0.5 MMT to 21.56 MMT due to severe cold weather, specifically citing damage to the crop in Eastern Europe.
Statistics Canada placed total wheat stocks there as at 31 December 2016 at 25.03 MMT, over 800 MT above the average trade expectation.
Chicago Grains Close - Friday
W/E 27/01/17 -- Soycomplex: Beans closed virtually unchanged on the day but lower for the week. The Buenos Aires Exchange put projected Argentine soybean production at 53.5 MMT versus 56 MMT a year ago and 57 MMT from the USDA currently. IMEA estimated the Mato Grosso soybean harvest in Brazil at 16.25% complete. Mar 17 Soybeans settled at $10.49 1/4, down 1/4 cent; May 17 Soybeans settled at $10.58 3/4, down 1/4 cent; Mar 17 Soybean Meal settled at $343.00, up $0.60; Mar 17 Soybean Oil settled at 34.27, down 20 points. Versus last Friday nearby beans are 18 1/4 cents lower.
Corn: The corn market closed a touch lower. The Buenos Aires Grain Exchange estimated Argentina corn planting at 98.3% complete. The market is starting to get worried about a trade was with Mexico. With President Trump insisting that Mexico will foot the bill for the controversial wall between the two nations - and Mexico insisting that it won't - it needs remembering that the latter take almost 25% of all US corn exports, a very significant volume. A timely start to the soybean harvest in Brazil suggests good early progress can be made with safrinha corn planting. Mar 17 Corn settled at $3.62 1/2, down 1 1/4 cents; May 17 Corn settled at $3.69 3/4, down 1 1/4 cents. Mar 17 corn was down 7 cents on the week.
Wheat: The wheat market closed lower. It's worth noting that near neighbour Mexico account for around 12% of US wheat exports. Analysts will be keeping an eye on Russian weather this weekend with a strong cold spell expected. EU wheat exports are running 7% lower year-on-year. Russia struck a clean sweep in the latest Egyptian tender, winning a 410,000 MT order. Japan’s Ag Ministry reported that 60,610 MT of US wheat were purchased in their weekly tender. Rusagrotrans predicted Russia's Feb wheat exports at similar levels to a year ago. Mar 17 CBOT Wheat settled at $4.20 1/2, down 6 1/2 cents; Mar 17 KCBT Wheat settled at $4.34 1/4, down 6 cents; Mar 17 MGEX Wheat settled at $5.60, down 6 3/4 cents. Mar 17 CBOT wheat was down 7 3/4 cents on the week.
EU Grains Close - Friday
W/E 27/01/17 -- EU grains closed narrowly mixed Friday with Jan 17 London wheat up GBP0.05/tonne at GBP148.35/tonne, Mar 17 Paris wheat down EUR0.50/tonne at EUR169.50/tonne, Mar 17 Paris corn unchanged at EUR171.25/tonne and Feb 17 Paris rapeseed up EUR0.50/tonne to EUR428.25/tonne.
For the week Jan 17 London wheat was up GBP0.60/tonne, Mar 17 Paris wheat was down EUR0.25/tonne, Mar 17 Paris corn rose EUR1.25/tonne and Feb 17 Paris rapeseed was up EUR3.25/tonne.
London wheat prices remain firm, despite a firmer sterling this week on robust UK growth. This "likely reflects the tightness in UK supplies compared to demand this season," say the HGCA.
EU soft wheat exports are now running at 13.9 MMT, down 1 MMT or 7% on a year ago, according to the latest figures from Brussels. The EU also awarded this week 83,596 MT of Ukrainian wheat imports under a special annual tariff-free quota deal.
EU barley exports total 2.5 MMT, whilst corn imports stand at 6.0 MMT.
Egypt's GASC bought 410,000 MT of Russian wheat in a tender.
Rusagrotrans forecast Russia's Feb grain exports at 2.3-2.4 MMT versus 2.75 MMT a year previously. Wheat exports will make up 1.70-1.85 MMT of that total, a similar volume to that of Feb 2016.
Chicago Closing Comments - Thursday
19/01/17 -- Soycomplex: Beans closed lower. A Farm Futures Magazine survey estimated 2017 US soybean spring plantings at 90.52 million acres, up a hefty 7.12m, or 8.5% versus 83.4 million acres in 2016. The Buenos Aries Grain Exchange cut their forecast for Argentine plantings this season to 19.2m hectares, a drop of 900,000 hectares year on year. The Rosario Exchange cut its forecast for output by 1.5 MMT to 52.9 MMT. Trade estimates for tomorrow's one day delayed weekly export sales report for beans are 400,000 to 750,000 MT. Mar 17 Soybeans settled at $10.70 1/4, down 4 3/4 cents; May 17 Soybeans settled at $10.78 1/2, down 5 1/4 cents; Mar 17 Soybean Meal settled at $348.20, down $2.90; Mar 17 Soybean Oil settled at 35.44, down 14 points.
Corn: The market closed around a cent higher. The USDA reported export sales of 110,400 MT of US corn for delivery to unknown destinations during the 2016/17 marketing year. Trade ideas for tomorrow's weekly export sales are pretty strong at 1.0 to 1.5 MMT. US weekly ethanol production data topped trade expectations at an impressive 1.054 billion barrels/day, setting another new weekly record volume. Ukraine think tank UNIAN forecast the country's 2016/17 corn exports rising to 20.9 MMT this season. Worries remain over the relationship between the US and China, especially vis-a-vis corn, ahead of the inauguration of President Trump tomorrow. Whilst Chinese US corn imports are only minimal, they have been a significant importer of US DDGs and ethanol in the last 12 months. The sudden imposition of anti-dumping import duties threatens to slash this business by half, or more. Mar 17 Corn settled at $3.66 1/4, up 1 1/4 cents; May 17 Corn settled at $3.73 1/4, up 1 cent.
Wheat: The wheat market closed mixed, with Kansas down the most, Minneapolis nudging higher, and Chicago in the middle. Trade forecasts for tomorrow's weekly export sales report are between 250,000-550,000 MT. Japan bought 117,605 MT of US/Canadian wheat in their regular weekly tender. Taiwan are in the market or 93,600 MT of what will probably turn out to be US milling wheat, Morocco are reported to have bought 363,636 MT of EU soft wheat in a tender. Jordan bought 50,000 MT of hard wheat. Egypt are tendering for wheat for Feb 22 - Mar 3 shipment, having bought a mixture of mainly Russian and Romanian wheat recently. Results of that are expected Friday afternoon. The Buenos Aries Grain Exchange estimated final wheat production in Argentina this year at 15 MMT, up 39% on a year ago largely due to increased plantings. Mar 17 CBOT Wheat settled at $4.23 1/2, down 7 1/2 cents; Mar 17 KCBT Wheat settled at $4.42 1/4, down 10 cents; Mar 17 MGEX Wheat settled at $5.76 1/2, up 3 cents.
EU Grains Mostly Lower
The day ended with Jan 17 London wheat down GBP1.40/tonne at GBP147.00/tonne, Mar 17 Paris wheat was down EUR0.25/tonne at EUR169.50/tonne, Mar 17 Paris corn was unchanged at EUR169.50/tonne and Feb 17 Paris rapeseed rose EUR2.50/tonne to EUR420.75/tonne.
The latest customs data from Brussels shows EU soft wheat exports running 3% lower than year ago levels at 13.6 MMT. A continuation of this slowdown is expected in the second half of the season, with total final all wheat exports likely to be in the region of 25.5 MMT versus 35.7 MMT a year ago, for a drop of 28.6% say the USDA.
French analysts Strategie Grains forecast next season's EU 2017/18 soft wheat exports at 26.5 MMT in it's first forecast of the year, flagging a dent in production hopes after this month's cold snap, note Agrimoney. (The EU Commission have this season's soft wheat only exports at 23 MMT versus an average of 32.0 MMT/year in the three seasons to 2015/16).
"Strategie Grains also factored in an EU soft wheat harvest of 143.8 MMT this year, a downgrade of 1.2 MMT on the previous estimate. The downgraded figure still represents a sharp recovery, of 7.9 MMT, on the 2016 result," Agrimoney however note.
On the international tender front, Jordan bought 50,000 MT of hard wheat in a tender for 100,000 MT, and are tendering for 50,0000 MT of feed barley. Taiwan are in the market for 93,600 MT of what will probably turn out to be US milling wheat, Morocco are reported to have bought 363,636 MT of EU soft wheat in a tender.
Egypt's GASC are back in the market today tendering for wheat for Feb 22 - Mar 3 shipment, having bought a mixture of Russian and Romanian wheat recently. Results of that are expected Friday afternoon.
A Ukraine think tank (UNIAN) estimated 2016/17 grain exports at a record 43.7 MMT this season, including 20.9 MMT of corn 16.5 MMT of wheat and 5.3 MMT of barley. Last season's grain export record was 39.4 MMT.
Chicago Grains Market - Midday Update
18/01/17 -- Around midday London time Chicago grains trade with the soycomplex mostly lower, consolidating from yesterday's gains, with beans down 4-6 cents, meal $3-4 weaker and wheat and corn around unchanged.
News that Morocco bought almost 360 TMT of US soft wheat under a preferential tariff quota agreement was welcomed by the US wheat market yesterday. Weekly export inspections, whilst not exactly brilliant at 344,436 MT, were still more than 31% on the previous week. Weekly export inspections for beans were a respectable 1.4 MMT, which those for corn were 888 TMT.
Ahead of Friday's Trump inauguration, China recently raising its import tariffs on DDGs means that there has been talk of a similar import tariff move on ethanol, which is also mostly sourced from the US. China are of course desperately seeking ways to encourage the off take of their own domestic corn stockpile is any which way, shape or form.
There's talk of private estimates for Argentine soybean production coming in at only 51-53 MMT versus the current 57 MMT from the USDA, mostly due to unsown acreage due to flooding.
EU Markets Nervous Ahead Of Trump Inaugration
May 17 London wheat trades GBP0.50/tonne higher at GBP150.25/tonne, May 17 Paris wheat is down EUR0.25/tonne to EUR172.75/tonne, Mar 17 Paris corn is also down EUR0.25/tonne at EUR168.75/tonne and Feb 17 Paris rapeseed trades EUR1.00/tonne lower at EUR417.75/tonne.
London wheat is boosted once again by a lower sterling which trades at 1.23 against the US dollar and a little over 1.15 versus the euro.
Any possible damage to crops in eastern Europe, southern Russia and Ukraine due to the recent cold spell is being largely played down/ignored by the market for the time being.
Ukraine says that winter grains were sown on 7.2 million ha, and place emergence at 95% on 6.8 million ha of that. Of the emerged area 83% of the crops are said to be in in good/satisfactory condition and 17% weak/thinned.
Customs data shows Russian seaports exporting more than 456 TMT of grains last week, including 234 TMT of wheat.
Morocco are said to have bought a significant volume of US wheat under a preferential duty agreement between the two countries. They are now said to be tendering for EU wheat also.
