Wheat futures have kicked off the year nearly -20c lower as a round of profit taking following a very poor US export inspections report and a strong USD sent agri-markets sharply lower.
Matif followed suit and ended the day -€6.25/mt lower on the March contract.
US wheat export inspections came in at only 86k which was well below market expectations of 250-450k.
Argentina received some showers the last couple of days which was well too late for wheat crops with 2022 being the 2nd driest year (2nd to 2008) in the past 35 years. Harvest is now more than 90% complete although with a G/E rating only at 8% vs 78% last year.
Australia’s harvest got through a big chunk over the Christmas/NY holidays due to favourable conditions with up to 80% already complete.
Cash markets to start the year while slow are starting to show, with Ukr11.5 CFR offered at USD350/mt CIF SEA. Braz12 offered low $350s CFR SEA
There have been no deliveries against the January canola contract, open interest is 69 contracts
There are no warrant/delivery cert open
Grains are lower once again this morning, but soybeans found support as a drop in beans makes crush even more profitable.
Oil is falling over concerns on the global economy and China covid cases.
StoneX updated its forecast for the 2022/23 Brazil corn crop to 128.71 MMT compared to 130.3 MMT in the previous forecast.
The USDA Fats & Oils report showed 189 million bushels of US soybeans were crushed in November 2022, below the average trade guess. Reuters survey respondents on average expected 190.2 million bushels.
447.4 million bushels of corn was used for ethanol in November vs. 466.9 million bushels in the same month a year ago. 1.778 million tons of DDGS were produced in the November vs. 1.997 the year prior.
Brazil’s new President Luiz Inacio Lula da Silva issued a decree that keeps fuels exempt from federal taxes. The sugar and ethanol industry was expecting taxes on gasoline and ethanol to resume. New York sugar futures fell 2% as a result. Federal taxes in Brazil are heavier for gasoline than ethanol, so the reinstatement of federal taxes was seen to be positive for ethanol and a chance to increase market share. The tax exemption is accused to be unconstitutional due to a law that requires the federal government to give a tax incentive for biofuels.
Bird flu was found 90 miles west of Prague in the Czech Republic, authorities will destroy 750,000 hens.
Tunisia is looking to purchase 100,000 metric tons of milling wheat. It’s optional origin with the submission deadline set at January 5.
An importer group in the Philippines wants to purchase 110,000 metric tons of animal feed wheat. The submission deadline is January 5. The group is looking for delivery in February and March.
Analysts expect Russia’s January wheat exports to be at least 3.6 MMT.
South Korea purchased 6,000 metric tons of GMO-free food grade soybeans in a tender of 25,000 metric tons that closed today.
Mpls wheat –5
KC wheat -10
Chic wheat -8
Matif wheat -3
Soybean oil -18