International Grain, Seed and Fertiliser Merchant

Monday 12 February 2018

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Daily Grain Comments

  • US markets – soy lower as US$ moves higher and crude was lower. Corn lower on higher US$ and weak energy markets, while Argentine concerns limited losses. Wheat lower after last week’s sharp rally, higher FSU exports/lower US outlook.
  • CFTC reports showed that a/o 6th February, managed funds cut their Chicago wheat short by 13369 contracts (now seen 83394 contracts short), went long of KCBT wheat by 15157 contracts, and extended their long Minneapolis position by 1338 contracts.
  • CFTC reports showed that a/o 6th February, managed funds cut their Chicago corn short by 48018 contracts (now seen 82924 contracts short), and cut their short Chicago soybean position by 11871 contracts (now seen 9978 contracts short).
  • US Midwest weather sees a band of snow moving from the plains and across Illinois into Indiana and Ohio. Temperatures will gradually warm back to near normal by the end of the week.
  • US east coast weather will see the remnants of the Midwest snow system later over the weekend and into this week. Southeast will see rains over the next few days and the Southwest remains warm and dry.
  • The 11-16 day forecast has warmer than normal temperatures in the SE and SW with below normal reading in the PNW, Plains and Midwest. Below normal precipitation is expected out west and into the Plains with above normal precipitation in the Delta and East Coast regions.
  • The BAGE lowered their Argentine corn crop estimate to 39mln t, from 41mln t previously. The exchange also lowered their soybean production estimate to 50mln t, from 51mln t previously.
  • Some Chinese buyers have cancelled corn purchases from the US and switched to rival supplier Ukraine, as Beijing tightens controls on processing genetically modified strains of the crop – up to 4 cargoes were cancelled in January.
  • Indonesia is poised to become the world’s top wheat buyer as bread emerges as a new staple food, driven by increased demand for sandwiches and baked goods. Imports may increase 23% y/y to 12.5mlnm t in 2017-18 on demand for food and livestock feed.
  • Another 200,000t of Pakistani wheat has been sold to overseas buyers in the past week, continuing heavy sales after the country started an export program incentive. More sales are expected in coming weeks as another 1.5mln t is set to be allocated to the new state scheme.
  • Egypt purchased 360,000t (240 Russian and 120 Romanian) for 5-15 March. Prices paid were about $2/tonne higher than previous tender on the 2nd Feb (albeit for a different position). Ukrainian wheat also offered (1 cargo), but was about $5-6/t too expensive.
  • Ukraine looks increasingly poised for a record wheat harvest this year, as a relatively warm and wet winter is keeping plants in good shape. Harvest may total 27.3mln t, a 5% y/y gain to beat the previous record set in 2016.

Last Trade Settlement:

London May ’18 Settle £138.80/t – up £0.80/tonne from previous close

Paris May ’18 Settle €161.75 – down €0.50/t from previous close

CBOT Mar ’18 Corn Settle $3.6200/bushel – down 3.75 cents/bushel from previous close

CBOT Mar ’18 Wheat Settle $4.4900/bushel – down 7.25 cents/bushel from previous close

Currency Today:

GBP EUR    1.1290

GBP USD    1.3845

EUR GBP    0.8855

EUR USD    1.2265

 

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Lindsey House, Hemswell Cliff,
Gainsborough, Lincolnshire DN21 5TH.

Company Number: 534118