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

Mar 08 2016

Weekly Report 27/2/16

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BEANS/CANOLA

Chicago May-16 soybean prices lower for the week, at 859.0 US¢/bu, down 20.6 US¢/bu.

Canola took a huge knock over the week with ICE Canola March 16 finishing at CA$447.8 down CA$16.4/t for the week.

Canola was the hardest hit over the week as China formally confirms, that it plans to toughen its standard for imported Canadian canola reducing the amount of foreign material allowed from 2.5% to 1.0%. – With talks that they will do the same to Aussie canola specs.

The Canadian Dollar continues to climb higher weighing on values.

The USDA estimate US farmers will plant 82.5 million acres of beans which would be the third-highest on record.

The Brazilian soybean harvest crop continues to grow with harvest currently around 25% completed, estimates show the harvest will certainly be over 100 million mt.

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Weekly Report 16_02_27

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.

To read the full report click the link below.

Weekly Report 16_01_29

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

Jan 06 2016

Weekly Report 26/12/15

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WHEAT

US Wheat markets pushed lower again prior to the Christmas holiday, as the market struggles with strong export competition and ample global supplies.

CBOT March 16 futures fell 14.6Usc/bu and finished the week at 469.4Usc/bu.

The winter wheat crop in the U.S. went into dormancy in decent enough shape. Some of the key states will update conditions over the winter, but the next benchmark for the market is Jan. 12, when USDA releases grain stocks and seedings reports.

Winter wheat in the Black Sea region appears to be improving after a rough start, though wheat production could still be down in Ukraine and perhaps Russia, but this is not seen as a major concern to buyers, considering the heavy global stocks.

Argentina returns as a competitive player in the world market, after the new government lifted currency and export controls. The recent changes has seen the Argentinian Peso weaken by nearly 27%.

Last week saw Argentina win the Egyptian wheat tender, with price being the clear deciding factor of the trade. Egypt purchased 120,000t of wheat at approx. $175/t, with the best French offer at $187/t and Russia at $193/t. Making Argentina 10% protein wheat the cheapest in the world!!

Russian lobbyists are calling for the Russian wheat export tax to be reduced. Russia is now the only mainstream exporter with export taxes in place. The markets have so far reacted bearishly to this news, as a lower tax could spur on the Russian export pace, in turn adding pressure to global wheat prices. Even if it does not increase export pace, Russian wheat may become more price-competitive with a lower tax.

Weekly Report 15_12_26

Dec 22 2015

USDA raises global production again

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Wheat rallied last week posting solid gains from start the week. Heavy deliveries and a strong dollar pressured while technical buying helped wheat recover losses from last week. CBOT Wheat March 16 futures rallied 4% and finished the week 495.40 USc/bu. Up 16.8 USc/bu week on week.

The US winter wheat conditions have remained steady at 55% good to excellent following recent moisture events, and this should allow for the winter wheat to move into dormancy in very good shape.

The USDA Supply and Demand Estimates report released on Thursday saw minimal changes to the US wheat balance sheet. However Global wheat stocks forecasts were raised higher by 2.3 million tons. World wheat production remains at a record high and is raised 1.9 million tonnes to 734.9 million. The upward revision from the November report follows increased production estimates for Canada up 1.6 million tonnes to 27.6 million and the EU.

The USDA reports Australian wheat production will still be at 26 million tonnes, while ABARES recently reduced our production by 1.3 million to 23.96 million tonnes. ABARE also reduced their estimate of Australia’s 2015/16 wheat exports to 16.95 million tonnes from 17.53 million tonnes. (16.6 million In 2014/15).

Brazil’s wheat crop has been lowered again to 5.2 million tonnes down from the 6.2 million tonnes last month. Increasing the potential for wheat imports from the US during 2016.

India’s wheat crop plantings are raising concern with only 200,000 hectares planted vs 242,000 last year, as high temperatures delay plantings, however India still have ample stocks to cover any short/medium term requirements.