Mar 16 2016

Weekly Report 5/3/16

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BEANS/CANOLA

Chicago May-16 soybean prices increased 1% and settled at 863.6 US¢/bu on Friday, as the sharp rise in Brazilian Real hurts their export prospects, and also found support on the back of weather concerns in the US.

Canola took a huge knock over the week with ICE Canola March 16 finishing at CA$452.3 up CA$4.5/t for the week.

Although the international markets saw increases last week, there is still growing concerns that the South American crop could limit gains in the near term.

With the Brazilian Soybean harvest gathering momentum and 54% complete. Informa has increased the Brazilian soybean crop to 101.3 million mt up 800,000t from their previous estimate.

The Argentine soybean crop has benefited from the recent rainfall and the crop is now well into their flowering period and pod fill stages. Informa lowered the Argentine production by 1 million mt to 58 million mt.

COFCO estimate Chinese soybean imports could reach 83 million mt, due to improved margins on the pig production, This estimate is above the 80.5 million mt estimated by the USDA.

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Weekly Report 16_03_04

Feb 23 2016

Weekly Report 12/2/16

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WHEAT

The grain market was quiet on Friday, with the US market slowing down for the Presidents Day Holiday weekend.

CBOT March 16 futures finished the week lower at 457.2US¢/bu down 15.4 US¢/bu for the week.

This week saw the release of a very bearish USDA report on Tuesday evening our time. The USDA added 6.8 million tonnes to global wheat ending stocks to a record 238.9 million tonnes. The increase in stocks mainly came from reduced demand from India and China. Wheat usage in China is estimated to be 4.7 million tonnes lower than January’s report as the governments internal economic food policies favour other grains. Global production was revised higher in Argentina (+0.5 million tonnes) and Ukraine (+0.3 million tonnes). Australian wheat remained unchanged in the report at 26 million tonnes – way too high!

Egypt tendered for wheat on Monday and received no offers to do uncertainty about quality restrictions. Egypt in an attempt to clear that up Egypt’s Supply Ministry and GASC have both confirmed that they will accept shipments with up to 0.05% of ergot, and reissued a tender and purchased one cargo of Romanian wheat at US$190.88/t (Cost and freight). It is reported that Bunge has launched legal proceedings to challenge the decision made by Egypt to reject the French Cargo.

India is predicted to harvest its smallest wheat crop in six years after two successive years of below-average monsoon rainfall. The Indian government estimate that Indian wheat production is at 93.8Mt. This figure is down from 95.9Mt last season (USDA) and below government targets of 94.8Mt. This potentially opens the door for wheat imports from Australia.

Attaché estimate, Canadian wheat plantings will fall to a 5 year low of 9.26 million hectares in 2016. This estimate is below the initial estimate from the International Grains Council which sits at 9.5 million hectares.

Russian Ukraine wheat crop at risk. Recent mild temperatures and rainfall has reduced snow cover across central and southern Russia and eastern Ukraine. With some regions of Ukraine are seeing problems of freezing with almost a third of the crops at risk. A close eye will be kept on what the weather does now as we enter that final period of winter as there are a couple of scenarios that could play out and result in elevated levels of winter kill this year.

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Weekly Report 16_02_12

Feb 17 2016

Weekly Report 5/2/16

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CORN/BARLEY

March 16 CBOT corn futures closed higher at US$3.68 per bushel up 3.0 Usc/bu for the week.

Brazil’s corn forecast was increased by 1Mt to 83.3Mt in January by CONAB. Exports of corn were also revised up and are expected to reach 29Mt, with high demand due to weak local currency. The lower Brazilian Real supporting local farmers to sell to the export market not the domestic end users.

Informa has raised the Argentine corn crop forecast to 26 million tonnes up 4 million tonnes from their previous estimate of 22 million tonnes.

South African grain association – Grain SA has lowered their initial estimate of corn imports from 5 million tonnes to 3.8 million tonnes.

Barley prices are also lower over the week against reflecting a lack of demand and the firmer AUD.

AUSTRALIAN DOLLAR

The Aussie traded at the 72¢ this week for the first time since early January.

The Reserve Bank has left interest rates unchanged at their February 2016 meeting.

WEATHER

BOM forecasts rainfall is more likely to be above average across much of the southern half of Australia with the strongest probabilities in the southeast over the next 3 months.

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Weekly Report 16_02_05

Feb 09 2016

Weekly Report 29/1/16

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WHEAT

Grain markets ended the month of January making up some of the losses they started the year off with. Wheat managed to finish up almost 2% up from where it started the year.

CBOT March 16 futures finished the week slightly lower at 472.2Usc/bu down 2.8 USc/bu for the week.Potential cuts to the Russian wheat export tax, as well as the possibility of export restrictions were amongst the main topics last week.

In Russia the Ruble has fallen to an historical lows – US$1=84.24 RUB. A fall in the Ruble has caused the local Russian grain price to rise, placing pressure on the pig and poultry margins. As a result changes to the export system are being considered to support domestic end users, a decision will be made on 3rd February.

Speculation of potential changes to Russian grain export policies supported wheat futures early in the week, with wheat futures closing up 9.2USc/bu on Tuesday.Snow cover falls as temperatures rise in Eastern Europe. Warmer temperatures in the last few days has caused protective snow cover to diminish – temperatures are expected to remain above normal going into this week, preventing any threats of damage to wheat areas. Snow is expected to fall in Ukraine and Russia this week which should help protect against winter kill.

Over the weekend, there was confirmation that Egypt had rejected 63Kt of French wheat due to the presence of ergot. The Egyptian agriculture minister has specified a zero tolerance on ergot. Despite a 0.05% allowance in international standards.

Worries over the size of Indian 2016/17 wheat crop has prompted flour millers to call for the 25% duty on wheat imports to be removed from April. Wheat plantings were down 7% year-on-year at the end of December due to a lack of rainfall and the unfavourable conditions have persisted into January. This is the second year of challenging conditions, and could lead to increased import requirements.

In the short term the outlook is downward, with the market holding out for news of the Northern Hemisphere crops coming out of dormancy, however there will be no clarity until mid-March.

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Weekly Report 16_01_29

Feb 02 2016

Weekly Report 15/1/16

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WHEAT

CBOT March 16 futures finished the week slightly lower at 468.4Usc/bu down 0.8 USc/bu for the week.

AUSTRALIAN DOLLAR

The Aussie dollar finished the week at the 70c mark. China’ growth prospects appear sluggish and if their economy continues to slow we can expect our A$ to come under pressure too.

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Weekly Report 16_01_18

Jan 27 2016

Chinese volatility affects Ag markets

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CBOT March 16 futures finished the week slightly lower at 468.4Usc/bu down 0.8 USc/bu for the week.

Some of the US hit by storms late last month and concern was rising about the condition of the growing winter crop. The latest USDA crop condition rating suggesting that the unfavourable weather thus far had done little damage to the 2016 crop. With Good to Excellent ratings for selective states all over 50%.

Weather conditions across parts of Poland, Ukraine and Russia saw temperatures plummet low enough to cause possible winter kill. Nevertheless also bringing greater snow cover to protect the winter crops ahead of harsher weather in the coming weeks.

US Wheat continues to struggle to find export demand. With shipments of US wheat at the lowest levels since the marketing year began. For the week ending 31 December the US exported only 76,500t of wheat well below 200 – 400k analysts’ expected.

Furthermore Argentina’s 2016 wheat production has been forecast up to 10.1Mt, 0.6Mt higher than the previous estimate. The upward revision is due to higher than expected yields. Wheat exports from Argentina are expected to increase!

An increase of supply to an already ample market combined with the slowdown in the Chinese economy and a stronger US dollar points to further pressure on US exports.

Jan 19 2016

Weekly Report 8/1/16

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WHEAT

Agricultural markets had a rough week as the market reacted to the volatility in the Chinese economy. China is a major importer on the global market, so any reduction in the Chinese economy raises concern on future demand. CBOT March 16 futures finished the week slightly lower at 468.4Usc/bu down 0.8 USc/bu for the week.

With some of the US hit by storms late last month, concern was rising about the condition of the growing winter crop. The latest USDA crop condition rating suggesting that the unfavourable weather thus far had done little damage to the 2016 crop. With Good to Excellent ratings for selective states all over 50%.

Furthermore Argentina’s 2016 wheat production has been forecast up to 10.1Mt by the Buenos Aires Grains Exchange in its latest weekly report, 0.6Mt higher than the previous estimate. The upward revision is due to higher than expected yields. Wheat exports from Argentina are expected to increase!

An increase of supply to an already ample market combined with the slowdown in the Chinese economy and a stronger US dollar points to further pressure on US exports.

To read the full report click the link below.

Weekly Report 16_01_08

Jan 12 2016

Weekly Report 2/1/16

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CORN/BARLEY

In a subdued finish to 2015 corn hit new contract lows of US$3.57 during the week.

March 16 CBOT corn futures closed lower at US$3.58 per bushel down 6.8 Usc/bu for the week.

To avoid national shortages and to slow down rising prices, India will import 0.5Mt of duty free corn, the country’s first overseas imports in 16 years. For the second year in a row, severe drought in India has hindered domestic output. India traditionally is a major exporter of corn to Southeast Asia. The switch in the country’s position could give more trade to other large corn exporters such as US, Brazil and Argentina.

Severe drought conditions currently persist in South Africa is raising concerns, they may have to import corn as early as May if conditions do not improve.

BEANS/CANOLA

Chicago May-16 soybean prices closed at 865.6 USc/bu, down 15Usc/bu in comparison to the previous week.

The condition of Ukraine’s winter rapeseed crop was little changed in the week ending 24 December. A marginal improvement (of 0.4% week-on-week), took the proportion of the crop rated good/satisfactory to 68.6%, down from 80.4% at the same point in time last year.

One of the watch points for oilseed markets over the last week has been the impact of improved weather in Brazil. While dryness remains widespread throughout stretches of northern and north-western Brazil, rains over the last week have helped to improve soil moisture. This has led to pressure for US soybean prices. However, additional rains are still needed to curb dryness in key growing regions.

To read the full report please click the below link.

Weekly Report 16_01_02