Corn, soybeans and canola markets all lower overnight, SRW another heavy fall.
Wheat just can’t catch a break – Chicago traded down throughout the US session to close -8¢ and KC -2¢ (K), while Minny picked up 5¢ on the front end and Matif was off 1€. News remains relatively quiet, though deliveries have started on March contracts – we do make note that there was nothing registered for delivery on KC last night (400 lots on Chicago – but all on the lakes). Corn markets dropped 3¢, beans -7¢, and canola lost $4 on the front end (Matif -1€). Crude oil was up 20¢ on Texas (-40¢ Brent) at $57.15 and the DOW is trading down 17 points at time of writing. The AUD has weakened to 70.9¢ while the EUR has held at $1.138 and the CAD at $1.315.
More promises have been made on the US/China trade deal – but again little confirmable that has been released publicly. We also note that an announcement later yesterday confirmed that the US has finally won their WTO case against China for unfair government subsidies to farmers. Most are expecting this to be appealed, but it comes at an opportune time for US trade negotiators. On a more agronomic note, there have been reports that China will restrict internal live-port movements in an attempt to stop the spread of African Swine Fever – though with outbreaks already reported across much of the country it may not have a significant impact.
Signs of life in export enquiry
Saudi Arabia has finally come back to the markets for grain – tendering for 600 kmt of old crop wheat. No news on barley yet, but markets are hoping to see them follow the wheat tender with barley next week. The question there will be when and how much they take – March arrival is not in the cards, but there is still some chance for April. Meanwhile, US export sales were out for mid-Feb, with wheat and corn sales at the high end of expectations (0.5 MMT of wheat, 1.2 of corn) but beans stealing the show with 1.8 MMT of Chinese demand confirmed. There’s been more reports that Russia has no intention to ban wheat exports – no real surprise there, as they’ve been consistent in avoid direct bans throughout the season, prefering instead to pressure markets unofficially and let the price response do the work.
Cold weather is still on the forecast for the US into next week, and winter kill rumors are gradually starting (though this was also the case in each of the last cold snaps – and there proved to be no market response to any). Snow cover does help, but much of the more southern areas are uncovered. Looking towards the new crop, there are some good rains on the radar across the western EU which will help already good crop conditions there. Unfortunately though, the BOM’s outlooks yesterday brought nothing helpful to the east coast locally – calling for even drier conditions March/April/May than their previous update.