Straights Direct – Traders Notebook

New analysis from HSBC points towards a difficult period for the Pound. The bank suggests the currency is overpriced relative to its relationships with the bond market. ‘’the start of the BOE’s rate cutting cycle should see GBP weaken’’. HSBC expects the Bank to begin cutting rates in June.

Red Sea / Suez Canal – vessels being forced to go via the Cape, adding time, costs and insurance premiums to shipments from the east.

Panama Canal – Low water levels forcing vessels around the Cape, again adding time, costs and insurance premiums.

UK consumer confidence improved further in April to a two-year high, confirming the upward trend of the past year and boosting the odds of stronger economic growth in the coming months. UK inflation has fallen from nearly 9% to nearly 3% in a year. Markets continue to price 40 basis point of rate cuts by the BOE this year, with the first move expected in August.

Very light and dusty Maize Gluten continues to be loaded out of store in Avonmouth.

The meal program is now closed 1st/2nd and 7th May

As of late last week U.S farmers had planted 8% of their soybeans in line with last year and ahead of the 4% average.

The Argentine soyabean harvest is well behind schedule at 14% vs 36% average. Wet weather has slowed the harvest pace. The forecast looks dryer going forward with warming temperatures, so the harvest pace is expected to accelerate this week.

Non-GM soya. Significant production increases in African countries in recent years is putting them into a position to satisfying increasing demand in Europe.

Increased farmer selling in Brazil, weakness in the Brazilian real and increased export sales have added to the bearish tone this week.

The program is now closed up to and including the 22nd of May.

GBP is higher today against the USD, will ease commodity prices in the UK.

Favourable weather and little demand left soybean complex mixed yesterday. Soybean futures were up $0.04-0.08; meal was $2-3 lower. July-23 soybean meal traded down to its lowest in 5 months before recovering.

Fixings for nearby collection are not available currently.

Soya prices ex port UK were sharply down overnight

USDA WASDE report was unchanged to a little bearish. US Soybean outlook 22/23 is for increased production, crush and ending stocks. Soybean crop now 30mbu and crush 10mbu. Carryout raised 20mbu to 220.

No new fixings for Erith Rapeseed Meal until w/c 14th November

Due to the extreme weather that we’ve been experiencing over the past few days, time has been lost on the annual maintenance at Erith and start up has been delayed. As a result of this Rapemeal will not be available for collection on Thursday 22nd / Friday 23rd July. Collections booked for next week will go ahead as planned.

Word in the trade is that Rape crushing in Hull will cease permanently from the end of this year.

Trucking activity resumes in Argentina as strike ends after Easter weekend.
Brazilian bean harvest reported as 87% complete as of Apr. 16th.
USDA announced 126kt of old crop soybeans yesterday.
US 2022 soybean crop is 1% planted vs. 3% last year and 2% average.
China’s March bean imports from the US declined by 30% in March vs. previous year due to lockdown.

The market continued to mull over the USDA prospective plantings results that showed beans having higher acres than beans for the second time on record at 90.995 million acres as fertiliser prices made it the crop of choice, in turn causing a correction.

The Ukrainian war is seemingly entering into a new phase, with Russia’s focus now on securing the Donbas region. The impact of this is there may be more opportunities for Ukrainian farmers to drill their corn and sunflower and apply winter crops fertiliser in other parts of Ukraine. Secondly, there may be an increased focus from the Russians on securing the key exporting port of Odesa, which would severely impede exports if it sustains a high amount of damage, no matter what production Ukraine has.
The USDA quarterly grains and the prospective plantings reports are released this week which, based on previous occasions, often provides surprising results, although less so in soybeans. Market expectations are for soybean stocks to be up at just shy of 2bn bushels, although still well below the previous seasons between 2017-20. The report will also give the USDA’s first stab at the 2022/23 corn, soybeans and spring wheat situations.

132kt of old crop soybeans were sold to China on Friday’s daily reporting. The commitment of Traders report showed managed money adding limited length to their bean positions.

The Argentinian government has halted registering export sales of soymeal and oil. The move by the government suspends all 2021/22 products and new crop when harvest starts. Argentina’s average monthly exports were 1.5mmt of meal and 300,000 tonnes of soy oil in 2021, according to NABSA. To put this into perspective, according to the USDA, Argentina accounted for 41% of global soymeal exports and 48% of world soy oil exports in the 2021-22 crop year. The impact of this is more difficult to ascertain; the Argentinian government is in debt and will be keen to keep the tax dollars flowing. The market, therefore, is assuming that this export ban will be transitionary as they try to increase the export tax higher from 31%.
Harvest in the Southern state of Parana, which was heavily affected by drought, now stands at 54%.
As harvest is coming in, Conab has been busy revising down their Braz production estimate with another 2.7mmt removed, leaving the crop at 122.7mmt, 11% lower than the original estimates.
USDA reports soybean sales of 264kt of soybean sales to China. 129kt of old corn was also reported to an unknown destination.

Russia has banned the exports of fertiliser whilst banning some grains and oilseeds to the Eurasian Economic Union until Sep-22.

Source: Reuters/USDA

Urea market is getting tighter, suppliers are capping deliveries due to demand. Lead time is currently 6-8 days.

The March USDA WASDE is released tomorrow. As we have seen in previous reports, the market has its ideas on South American production and the USDA trails behind this in terms of reducing its size. However, it seems the market’s attention is elsewhere, although it will be interesting to see how the USDA tackles global exports.
Drought worries continue to be a factor for South America, especially Argentinian late-planted soybeans. BAGE estimates the 2021/22 soybean crop at 42.0 million tons, while the Rosario Exchange estimates the crop at 40.5 million. The Rosario exchange is working off a yield of 39.3 bu/ac, the lowest in 14 years.

ADM Erith are having Rapeseed meal loading issues which they hope can be resolved soon.

Offered prices on Soya are up £25/t (5%) this morning. They are guide prices and are subject to market movements and volumes. Sellers may well disappear if bid.

Most commodities are up £10 across the board.

Volatility continues to be the main story as Russia’s invasion of Ukraine looks longer-term than many expected. Ukrainian Ports are blocked by Russian vessels, and rumours of the EU implementing a 3rd country export bans on grain shipments add fuel to the fire, although the latter is nothing more than a rumour at this point.
2021/22 Brazil soybeans are 44% harvested vs 25% last year. Dryness continues in Brazil, although this is not a key market concern given the circumstances.
USDA reported 364kt of soybeans to unknown and 266kt of to China. Malaysian palm continues to make new highs.

Commodity markets continue to rise as the hope of a short war fade away. Talk of the Suez Canal being closed to Russian vessels will complicate trade flows.
Commodities stuck in Ukraine, combined with concerns over global fertiliser availability and questions over how much will be planted in Ukraine this spring, leave a highly volatile situation for all components in the feed market.

The market is coming to terms that this war may not be over in the foreseeable future and commodities from these origins may be offline for some time.
Worries over vegetable oil supply are underpinning the soy complex.
South American weather is slowing harvest in northern Brazil due to the wet weather with farmers harvesting wet beans, which are of lower quality. The heavy rain also adds to logistics problems for trucks collecting on-farm. The rapid harvest in the South leaves the crop well over a third harvested compared to less than 20% at this point last year.

Markets continue to be highly volatile as market participants analyse the impacts of sanctions on Russia and logistics in the Black Sea. Russia and Ukraine account for 29% of global wheat exports, 19% of world maise exports, and 80% of world sunflower oil exports. Reports suggest managed money liquidating some length, turning their attention to other assets. However, prices have rebounded this morning as news of further heightening tensions puts risk back on. Premiums are also higher.

Ukraine issues have given us a wild ride over the last couple of days. Prices up slightly on Wednesday, market in disarray Thursday with futures up substantially. Today they’ve lost some of yesterday’s gains.

The South American forecasts are coming to the front of the market’s mind as Soybean & Corn Advisor Inc. report reduction of 4mmt of production from Brazil, Paraguay and Argentina as a whole.
Although the weather in Argentina has escaped the worst of previous forecasts, dryness is now catching up. A 13% drop in a week of the soybean crop rated G/Ex and a 6% drop in ‘favourable’ soil moisture levels was noted, and they now stand at 75% and 92%, respectively. According to BAGE, the 2021/22 soybeans in Argentina were 64.7% planted last week vs 67.8% last year and a 71.8% average.
European gas prices add further fuel to the fire, with the front-month Dutch gas price (the European benchmark) up 22%, which will continue to upset crush margins.

The Rapeseed crushing plant in Erith has broken down. No meal available for collection today.

Precipitation moving across Northern U.S. growing areas 1-5 days.
Argy weather dry nearby – turning wetter over the weekend.
NOAA declared last week that La Nina has returned and is expected to continue for the next few months.
U.S. harvest @60% complete v’s 49% last week and 73% last year.
China’s Soyabean crush stood at 1.67mmt last week v’s 1.4 the week before.
Argy and Braz premiums unchanged.

Nearby fixings are getting tight

U.S. forecasts have added precipitation across the central and eastern Midwest 1-4 days turning drier next week.
Yesterday’s USDA had a number of surprises, most notably lower wheat and higher soya ending stocks. Corn stocks were marginally higher than expectations however, traders remain concerned of higher fertilizer costs and therefore less Corn for the 2022 marketing year.
USDA estimated US Sep 1st corn stocks near 1,236m bu vs 1,155 expected and 1,919 last year.
USDA estimated US Sep 1st soybean stocks near 256m bu vs 174 expected and 525 last year. The higher stocks was mainly attributed to the USDA raising the 2020 soybean crop from 4,136 mil bu to 4,216.
U.S. weekly export sales came in in line with expectations @1.09mmt
Poor farmer selling in Argy – premiums unchanged.

No available fixings for Erith Rapeseed Meal until the 6th October.

CBOT soybean futures crawled higher, finding a technical support despite increasing pressure from strong harvest progress. Turning to the weather, the US is to benefit from a another round of warm weather.

The USDA quarterly stocks report will be out on the 30th September.

US growing conditions remain good, with precipitation and below average temps for the Central/Southern Plains and Midwest. Less coverage for the Northern and Eastern plains.
Good growing conditions in the northern hemisphere and subdued demand from China continue to weigh on the market.
Some acres concerned due to summer weather in Dekotas where 12.7mmt US soybean acres are planted.
Reports of widespread rains across central and southern areas of China, with some reports of flooding.

Growing worries over the spread of African swine fever has pushed the Soya market down.

The next available bookings at ADM Erith are for the 1st March.

Brazil is experiencing large traffic problems and the queues into some northern ports are reaching 10,000 trucks

A fall of around £8 a tonne yesterday (Swine flu in Hong Kong) has been followed by a rise of £6/t today (Lower crop estimates in Brazil).

The Rapeseed crushing mill at Erith has suffered a breakdown today. Expectation is that it will be up and running by Monday the 15th February.

The price of Soya meal has dropped by £10/t since this time last week.

We’re awaiting vessels arriving in March and April. Until then there is a small tonnage available but in smaller more remote ports.
This is due to a lack of ethanol demand which means reduced grind rates, also overall demand is up given higher Soya prices and scarcity of other mid-proteins.

There are reports ASF has returned to the Chinese pig population however the virus isn’t quite as aggressive as the last strain but spreads quicker- however domestics hog prices are dropping which suggests there isn’t a problem

Weather in Argentina continues to look dry and they are talks of Truckers still blocking some roads into the ports

Wheat posted gains across all 3 US markets and in Europe following confirmation that Russia was headed toward a higher wheat export taxof 50 Euro per tonne from March 1, 2021.

Nearby fixings unavailable

Brazil have a staggering 7.5mmt soybeans on the books to China in Feb vs. their previous record of 5.2 mmt. While renewed Chinese demand sets the tone for the start of the year.

Soybeans rounded off the year with double digit gains at the front, putting gains for 2020 at some $3.30 as the market continued to fret about the dryness across Argentina with the latest report from the Buenos Aires Grain Exchange serving to highlight the potential crop impact.

• Funds brought 15,000 contracts of soybean taking their length back to 254,000 contracts
• South American weather shows little rain in the forecast for southern brazil and Argentina for the next two weeks
• The suggest carry out announced last week of 190 vs 523 last year- some feel final export demand could increase another 150 mil bu which could drop a carryout below 100 million bu
• Still rumours of china in the market but no trade announcements. The Chinese pig number grew 27% year on year with numbers expanding Chinese meal demand
• Our Prices are unchanged to down 1

Chicago bean futures saw another strong session on Thursday with big gains in soy oil helping to drive the complex higher. Corn closed off its highs, which for Dec was $4.17 1/4, but held onto 1 1/2 to 4 cent gains at the close. Corn futures have pushed higher as South America concerns linger, and the value of the US$ has fallen against a number of major currencies. Global wheat markets have pushed higher over the last couple days, buoyed by new crop condition concerns as parts of Russian remain dry in the short and medium term with strong global export demand. In the equity markets the FTSE 100 traded to its highest level since October 16th on Thursday after UK Chancellor Rishi Sunak announced the government will extend furlough until March 2021.

It was another solid day for world wheat markets with US futures at 5- year highs, CME Black Sea futures at all time-highs (since their inception in 2017), and Matif at contract highs as concerns persist for crops in Russia, the US and Argentina due to excess and ongoing dryness..CBOT beans hit contract highs yesterday as Spec Funds added another estimated 20,000 contracts to their already record long. The market is wary of a US yield in Friday’s USDA report which significantly tightens the US S&D, China reportedly continues to buy US beans despite the holiday, the US export program is already massive.The US$ handed back early gains in European trade Wednesday, as President Donald Trump’s twitter barrage created volatility.

Chicago futures soared on Wednesday after the USDA surprised traders by reporting crop inventories that were much smaller than expected. Corn supplies dropped by 3.024 billion bushels during the three months to September 1st, the second biggest summer draw down ever for the commodity. S bean futures rallied sharply on Wednesday after the USDA’s September 1st stocks report showed strong demand from China had tightened U.S supplies more than previously expected. Bean supplies dropped by 858 billion bushels during the three months to September 1st.Even as the dollar extended losses for a fourth consecutive day, it recorded its biggest monthly gain since July of 2019 as rising coronavirus infections in Europe increased the attractiveness of the safe-haven currency.

Despite weekly US corn export sales of 2.4 MMT coming in at the top end of expectations, CBOT corn fell 5¢ yesterday and is now down 5¢ on the week. The CBOT soy complex closed mixed yesterday with beans and meal higher whilst oil was weaker. The US$ has managed to halt its recent slide, but the overall sentiment remains one of weakness given the Federal Reserve has strongly implied that it intends to keep rates low for a very long time.Senior U.K. officials see only a 30%-40% chance that there will be a trade agreement due to an impasse over state aid rules and fisheries rights, The Times reported.

U.S grains continued higher yesterday with wheat benefiting from weekly export sales above expectations and corn finding support from further large daily sales to China. Soybeans caught a strong bid in Thursday’s session, up 13 1/4 to 17 3/4 cents, as some weather models flipped from forecasting wetter conditions in late August/early September to a slightly drier outlook. As Hurricane Laura made landfall on Thursday initial indications were that it would now miss the key bean growing areas across the Midwest. The dollar took back early session losses on Thursday to close largely unchanged on the day as Federal Reserve Chair Jerome Powell announced a flexible form of average inflation targeting in a widely expected move.

Chicago wheat settled fractionally lower on Friday after a volatile week, which saw big gains on Wednesday on rumours of Chinese interest, but all said and done the week ultimately finished largely where it started. Soyoil was the standout performer over the week in the soy complex, as U.S soyoil caught a bid from the 5 month highs seen in Asian veg oil markets. Over the week Aug-20 soyoil rallied 170 points, over 6%. Front month beans settled up 4 to 4 1/2 cents on the day and 10 3/4 higher on the week, with meal the clear laggard, down 50 cents to $1.20/t on the day and around $6/tonne lower on the week. The dollar index fell to 5 week lows on Friday, posting it’s fourth straight weekly loss. Against the euro the dollar was down around 1% on the week, but up around 0.5% against Sterling.

Another strong day for U.S grains yesterday, with the weather front and centre again. Gains were focused in Chicago which settled 8 1/4 to 8 3/4 cents higher. The U.S soy complex came out of the blocks hard yesterday, but beans drifted back through the session to finish 3 1/2 to 4 1/2 cents higher. Meal held on to it’s gains, closing around $3.50/t better off, eyeing the 3 month highs set at the start of the week. Soyoil was the laggard, off around 25 points as crude oil prices broke lower. The dollar bounced from 4 week lows on Thursday as the number of coronavirus cases in the US hit 3 million and the daily rate hit a new high of 63,000. The British pound gave up early gains following remarks from EU chief negotiator Michel Barnier that there are still “significant divergence” between the EU and the UK on Brexit following three days of talks in London.

.It was all about the USDA report yesterday with an especially aggressive, (although somewhat puzzling), cut in corn acreage provoking a sharp reaction across grains and beans. The USDA caught the market off-guard, lowering the total US crop area by 7.2 million acres vs the USDA March planting intention report. The USDA yesterday pegged 2020 soybean acres at 83.8 million acres versus 84.7 million acres average estimate. This is a bump of some 0.3 mm acres on the March Plantings report, and a 10% lift on last years acreage report. However it was short of expectations due in large part to a smaller switch of corn acreage into beans and that seems to grab the market’s attention..The dollar index, trading at one month highs early in the session, gave up those gains to finish flat on the day. Sterling shrugged of the weaker than expected Q1 GDP to trade back above $1.2400 against the dollar and above 1.1200 versus the euro.

Contrasting fortunes in the U.S grains yesterday with Chicago wheat posting good gains whilst corn broke sharply lower.U.S beans, down around 10 cents on the lows, rallied into the close to lose just 1 to 2 3/4 cents. . It was a similar story for meal, down 20 cents to $1.20/tonne .Sterling gained 0.2% against the greenback at $1.244 on Thursday, recovering from a sharp drop on Wednesday whilst the euro eased around 0.2%. EU negotiator Barnier said that a deal with the UK was possible, but London needed to give “clear signals” that it was ready to work towards one.

The grains finished in the red Monday, although off their worst levels as early news that China had ordered state owned companies to cease buying U.S Ag products.The soy complex suffered early losses Monday on reports that Beijing had instructed state controlled importers to row back on importing US commodities in retaliation for potential U.S sanctions aimed at punishing China for imposing national security laws on Hong Kong..The dollar index extended losses for the 4th straight session to 97.8 on Monday, the lowest since March 16th amid increasing concerns about the economic recovery and civil unrest across the country. The British pound was a beneficiary, hitting $1.2480 in afternoon trading on Monday

Chicago wheat led the charge higher yesterday, up 11 to 16 cents to close at the highest level since the 11th May. Soybean futures closed the session with gains of 3 to 4 1/4 cents. Meal futures settled off their highs but managed to finish in positive territory, just, with gains of 30 to 90 cents/tonne.The dollar index was unchanged Wednesday, trading around the 99.0 level, after FOMC minutes showed Fed officials expected the funds rate will stay at current 0%-0.25% level for some time. WTI July crude futures surged above $33 per barrel after EIA data showed US crude inventories fell by 4.983 million in the latest week, the biggest drop so far this year.

The Rain in Spain stays mainly on the the plain, I think she has got it!

1 A marked increase in UK Rape meal prices today. Soy meal is also a couple or more  pounds up.U.S wheat rounded off a tough week with another session in the red Friday. Chicago closed down 2 to 2 1/2 cents.An indecisive session saw beans eventually close in positive territory, up 1 1/2 to 1 3/4 cents on the day but around 10 cents lower on the week. Meal was the laggard in the complex, down 40 to 70 cents per tonne on the day and $2 to $3 lower on the week.The dollar index fell for the first time in 3 sessions on Friday after investors turned to riskier assets amid signs of recovery from China, as data showed industrial production increased for the first time this year. For the week, the dollar gained 0.6%. Sterling hit its lowest level in over a month after the EU’s Brexit negotiator Michel Barnier said that the third EU-UK negotiating round was “disappointing”, while Prime Minister Boris Johnson’s Cabinet reiterated it would not be extending the Brexit transition deadline beyond December. As in that favourite, Saxon phrase of mine, that combines, copulating while at the same time leaving!

All said and done corn emerged as the beneficiary of yesterday’s USDA May WASDE report, in price action terms at least, even as the 20/21 U.S corn crop was seen at 30 year highs. Beans finished 1 1/2 to 3 cents lower after digesting yesterday’s WASDE report, with soy meal $1.20/T to $2.30/T higher, with losses/gains concentrated at the front for both.The dollar index rose above 100 against a basket of currencies on Monday as investors fretted about a possible 2nd wave of virus infections as lock down restrictions were eased. Germany saw the rate of new infections accelerate while China’s health authorities reported the highest daily increase in new cases in nearly two weeks and South Korea said that infections had rebounded to a one-month high.

Either there is a worrying lack of demand or it is panic over regarding UK Rapemeal prices.U.S wheat closed mixed Friday even as corn and beans showed gains on the back of positive news from the latest U.S/China trade talks.Beans caught a bid Friday, with meal leading, as the market reacted to positive news from the latest U.S/China conversations.The dollar settled little changed Friday, taking back overnight losses as U.S. non farm payroll data came in at -20.5 million, better than expectations of -22.0 million, although still the biggest decline since the data series began in 1939. Stocks rallied in Europe and the U.S , with the DJIA closing up over 400 points, at one week highs, fuelled by reduced U.S./China trade tensions after China’s Ministry of Commerce commented that China’s Vice Premier Liu trade talks with U.S Secretary of State Mnuchin were progressing well. WTI crude futures rose by 5% on news that the number of US drilling rigs fell to an all-time low of 373. At a peak this was over 1400. Over the weekend, whilst the UK, France & Italy reported their lowest virus related deaths since March, Germany saw a bump higher in infection rates as lockdown measures were eased.

Spot Rape prices have fallen £40 a tonne since the 16th April.

Soya Hulls are difficult to find currently, particularly in the south of the UK.

Good Evening,

Currently the markets are as follows:

USDA REPORT:

Soybeans:

Production: Unchanged

Exports: The USDA lowered their old crop bean exports by 50 million bushels (Mbu) to 1.775Mbu due to poor sales (driven by record front loaded Brazilian exports)

Seed & residual: basis the Q stocks report the USDA lowered the seed and residual number by 26Mbu

Crush: The USDA raised their old crop crush by 20Mbu to 2.025Mbu

Meal: The USDA raised domestic US meal demand by 0,3Mst to 37,1Mst. Furthermore, US meal exports was raised by 0,25Mst to 13,45Mst.

Oil: SBO use for biodiesel lowered by 300Mn lbs and SBO exports raised due to strong commitments by 300Mn lbs, with a larger crush stocks increased 300Mn lbs to 1.8Bn lbs

Carry out: exports down by 50Mbu, crush raised by 20Mbu and seed and residual down by 26Mbu = carry out 55Mbu to 480Mbu (vs trade estimate of 430Mbu)

Corn:

Production: Unchanged

Imports: lowered by 5Mbu

Feed & Residual use: raised by 150Mbu due to less DDGS availability and less sorghum feeding.

Ethanol: lowered by 375Mbu to 5.050Mbu

Exports: unchanged at 1.725Mbu

Carry out: raised by 200Mbu to 2.092Mbu (vs the average market estimate of 2.004Mbu

Wheat:

Production: Unchanged

Feed & Residual use: Lowered by 15Mbu

Exports: lowered by 15Mbu to 985Mbu

Carry out: increased by 30Mbu 970Mbu, which was exactly the trade estimate

Global: they lowered Russian exports by 1,5Mt to 33,5Mt and as a result they raised EU exports by 1,5Mt + lowered EU wheat feeding by 1Mt = low EU carry out of 10,3Mt

UK prices amazingly are basically unchanged.It was a quieter session in the grains Tuesday. With the holiday shortened trading week and the WASDE report and OPEC + meeting to come on Thursday, wheat was fairly non-committal on both sides of the Atlantic.A mixed session for beans in choppy trade with May-20 closing out down C$0.75 and new crop Nov-20 up 1 1/2 cents. It was the oil leg of the complex doing its best to drive beans higher.Meal finished lower for the sixth consecutive session, its longest losing streak since January.The US dollar continued its retreat on Tuesday, falling to its lowest close in a week as investors welcomed a potential slowdown in the worldwide spread of the covid 19. Whilst New York reported it’s biggest one day jump in deaths on Tuesday. The P.M is reportedly stable and not in need of ventilation.

Most UK prices are unchanged or easier today. Wheat was the standout performer in the grains yesterday with Chicago leading the rally, up 6 1/2 cents at the front months,  up 2 to 2 1/2, and Kansas City up 3 to 4.Small gains for beans but another tough day for old crop meal even as macro concerns around.The pound weakened against the US dollar late in the session on Monday after the British Prime Minister Boris Johnson was moved to intensive care as his condition worsened. The news accompanies statistics from Italy, Spain and Germany showed slowing rates of infections and deaths. Despite the bullish advance from equities, oil prices dropped more than 3% as OPEC’s scheduled Monday meeting was postponed until Thursday

Frightening rises in Old crop Rape meal today lack of Bio diesel demand is reducing the crush and limiting Rape meal production. It is a similar story for Maize Distillers effecting by reduced Ethanol demand.  A mixed bag for US wheat as gains from the overnight session faded throughout the day.Corn, under pressure for most of the session from the drop in crude below $20/barrel, closed out down .Beans came out of the gates hard in yesterday’s session, at one point printing up C$10.00, but as wheat and corn slipped, it could not maintain its strength.Meal was the driver in the complex with old crop closing up C$0.90 – C$2.40, and new crop largely unchanged to down small. The dollar index moved higher Monday, by around 0.5% on safe haven buying as expectations the U.S economy will be locked down longer than earlier expected weighed on investors’ concerns. Crude oil prices dropped to an 18 year low, trading below $20.00 per day at their low. Stock markets bounced back and are more stable.

Mid proteins have eased in the UK accept Rapemeal which continues to tighten. Although nearby Maize Distillers are POA forward MDs dropped a Massive £11.UK Soyameal is lower benefiting from Sterlings continued back back against the US$ A quieter session Friday with Chicago HRW $1 to $2.25 higher, but over the week US wheat futures were up a very solid 15-30 cents with Covid19 panic buying of food in the domestic market being cited as the main reason for the lift. Beans went into the weekend mixed as front months May & July-20 closed small higher and new crop.In the meal May-20 finished marginally higher Friday with the rest C$0.60 to C$2.00 lower. The dollar posted its biggest weekly drop in over a decade last week as huge stimulus measures from governments and central banks across the world eased investors funding concerns. Sterling continued its sharp bounce, closing up some 2%.

Turnaround Tuesday lived up to its billing yesterday with wheat taking a break from its recent surge higher and corn finally catching a bid, albeit a small one, as energy markets bounced. Soybeans rallied from a very weak start to finish the session with modest gains. Overnight trading on meal has taken it slightly lower nearby as logistical fears ease very slightly forward positions however are incrementally high through to March 21 being $4.40 higher.The dollar weakened Tuesday, most notably against the pound, Presidents Trumps two trillion stimulus package eased fears stock markets especially the DOW which rose more than any day since 1933.

Please be aware that with markets so volatile prices are fluctuating rapidly and frankly cannot be kept bang up to date.A mixed bag for the grains Friday as wheat managed to sustain its rally, whilst corn came under pressure from the collapse in crude prices.due to the connection through ethanol manufacturing.The beans rallied hard again Friday, fuelled again by strong gains in the meal, with old crop closing C$14.50 to C$19.25 higher.The US dollar was the beneficiary again Friday from weakness in equities and crude oil.

The surprise cut interest rates yesterday has impacted Sterling and caused a rise in dollar based commodities in the UK.US Wheat markets were lower on Wednesday, closing 8 1/4 to 9 3/4. Fresh bullish fundamental news remain absent LIFFE feed wheat futures edged lower.The bean complex finished modestly lower – May beans settled at 873¼ cents/bu (down 3 cents), May meal closed at $301.60 (down 30 cents).Despite the numerous economic stimuli or expected ones around the world, growth concerns continue to weigh on equity/energy/ commodity markets after the WHO declared the coronavirus outbreak a global pandemic.

Large drops in stocks and oil markets weighed on the grains yesterday, but both wheat and corn showed impressive resilience recovering well in the latter half of the session.The collapse in crude oil and equities spilled dinto ag markets yesterday. May-20 beans closed down 21.25 cents and May-20 meal down $4.70 to start the week. Risk off dominated yesterday with huge sell offs in stocks and crude. Crude oil had its biggest one day price drop since the 1991 Gulf War and the Dow Jones Industrial Average was down over 2000 points on the open. The initial reaction in the currency markets was a drop in the US dollar with Sterling trading to 1.3200 and the euro trading above 1.1500.

A stronger session on Friday, with gains posted across the board in the grains, despite a stronger US dollar and the continued spread of the coronavirus. A choppy session on Friday in the oilseed complex with beans for the large part closing small positive, helped by some strength in the Meal. The dollar strengthened on Friday against both the euro and sterling as investors digested the key US January jobs report.

31.01.20 Rape meal March & April along with the front month February are all in the nearby premium slot. The stronger pound and continued sluggish activity in Chicago sees UK soya meal down by £4 today. The decision by the BofE not to reduce interest rates gave Sterling a shot in the arm taking it above $131.00 as the UK prepares to leave the EU later today and Mark Carney will shortly head for pastures new the good ship UK seems to be sailing serenely into an optimistic future.

Sterling has been dragged back by dovish noises from the BofE today regarding UK interest rates. This will lead to higher levels of commodities in the UK leading the way first in Erith Rape meal up £4.Store Rape meal up £2 Wheat Gluten up £3.Maintaining their recent pattern of quarterly report surprises, the USDA did not disappoint the trade on Friday with higher than expected 2019 production, In Friday nights report the bean yield was raised by 0.5 bpa to 47.4 bpa, while the market expected a reduction to 46.6 bpa before the report.The meal market is led by Argentina where we saw meal offers moving up more than $5 last week.

UK Rapemeal is unchanged but for an uptick of £1 on some sellers August October positions. Despite talk of WW111. UK commodities are broadly unaffected possibly helped by a slightly stronger Sterling. Soyameal is actually lower. ‘Don’t panic Captain.’US wheat futures began the New Year a little higher in low volume amidst an absence of fresh news. CBOT corn futures began 2020 with 3-4¢ gains and the highest intraday close for 2 months. Soya futures markets currently remain range bound. Meal between $290 and $320, beans between C$925 and C$1025. . Safe-haven currencies were in demand on Monday, along with assets such as gold, as investors fretted that the killing of Iran’s most prominent military commander by the US could trigger a broader Middle East conflict. We have of course already seen a rise in crude oil prices.

Maize & PK are both up £” today with ex store Rapemeal also adding another £1.Wheat was up sharply closing with highest levels in more than 4 months. China trade optimism was billed as the bullish feature.Soybean futures finished Monday’s round of trades with gains of as much as 13 1/2 cents. Meal futures were $4 /ton higher.The British pound fell on Tuesday after reports UK Prime Minister Boris Johnson was seeking a hard line on Britain’s transition period after Brexit.

The premium market in South America exploded yesterday on the news that Vicentin, one of Argentine’s biggest crushers (10% of the market), was short of meeting short term payment obligations. This created a complete shock in the Argentine market and all market offers were withdrawn. Ex Store Rapemeal in UK £2 higher. Wheat traded mostly lower Thursday with Chicago down 3-4. CBOT wheat was lower on weaker export prospects.The US$ was unchanged as traders awaited the release of the latest U.S. job report

12.11.19 Rapemeal is unchanged as are most mid range proteins allowing for some adjustments to Maize levels. Soyameal in the UK also appears unchanged which is disappointing looking at the Chicago numbers below.Wheat futures began the week lower on technical selling and weak export demand. USDA crop progress and export inspections are delayed until Tuesday.Soybean futures dropped double digits out of the weekend, falling by 12 3/4 to 14 1/2 cents on Veterans Day. Soybean meal is $4.30/ton lower at the start of the week. Brexit Party’s Nigel Farage sent the pound higher on Monday, as he announced he won’t fight Boris Johnson’s Conservatives in the upcoming general election his proposals to leave Tory seats unchallenged was interpreted as increasing the likelihood of the Boris WA being accepted or possibly a Canada ++, but mainly means there is a reduced fear of Corbyn being let in widely considered a disaster by most traders.

Rapemeal has continued to firm in the UK this morning ex store mid protein straights are unchanged but there has been a £2 up tick for Palm Kernel. Soya seems to be £2 easier. Chicago wheat finished 2-3 cents lower on Friday, despite the USDA lowering the 2019/20 US wheat crop. Chicago corn posted gains of around 8½ cents in the immediate aftermath of the USDA report but ended up only 2-3 cents higher at the close.Chicago beans and meal closed lower to end the week on Friday, with the optimism about US-China trade talks that marked Thursday’s trade disappearing on Friday.Sterling continues to trade the December 12th UK election, as the market continues to consolidate around the $1.28 level against the US dollar for the moment. Most weekend Newspapers had polls showing an increased lead by the Conservatives. This is help Sterling against a strong US dollar.

Wheat

The US crop was lowered by 42Mbu (1.14MMT) to 1,920Mbu (52.3MMT), with food & Seed usage slightly lower and exports unchanged at 950Mbu (25.9MMT). As a result the new crop carry out dropped by 29Mbu (0.79MMT) to 1,014Mbu (27.6MMT) versus the average market estimate at 1,035Mbu (28.1MMT).

The world wheat crop was raised by 0.3MMT, with the US -1.1MMT to 52,3, Arg -0.5MMT to 20MMT, Aus -0.8MMT to 17.2MMT and Russia +1.5MMT to 74MMT. World wheat demand was kept virtually unchanged. World exports was raised by 1MMT. Overall, world end stocks increased by 0.5MMT to 288.3MMT (vs 277.9MMT last year). Stocks ex China increased by 0.5MMT to 142.6MMT (vs 138.1MMT last year).

Corn

On corn, the US yield was lowered from 168.4bpa to 167.0bpa. Harvested acres were unchanged at 81.8mln, versus the avg market estimate at 81.5mln. As a result production came in at 13,661Mbu (347MMT) versus 13,643Mbu (346.5MMT) expected. However, offsetting the reduction in yield, the USDA lowered both the Feed & Residual figure (25Mbu [0.64MMT]) and Exports (50Mbu [1.3MMT]). As a result, the new crop carry-out came in at 1,910Mbu (48.5MMT) versus the avg market estimate at 1,817Mbu (46.2MMT).

World carry in dropped by 4MMT. World production dropped by 2MMT, mostly due to the smaller US. World demand was raised by 1MMT with. world exports raised by 0.5MMT. With the carry in lower and production down, world stocks fell by 6MMT to 296MMT (down from 320MMT last year).

Soybeans

There were no changes to the US yield (46.9bpa) and harvested acreage (75.6mln) so production was unchanged at 3550Mbu (96.6MMT) versus 3510Mbu (95.5MMT) expected. The only thing that changed was crush which was lowered by 15Mbu (0.4MMT), due to lower meal exports. All-in-all, the carry out increased from 460Mbu (12.5MMT) to 475Mbu (12.9MMt) versus the pre-report avg estimate at 428Mbu (11.6MMT)

World production was lowered by 2.5MMT but the main players were all unchanged (US 96.6MMT, Brazil 123MMT, Argentina 53MMT). World crush was lowered by 1.5MMT. World imports stayed virtually unchanged with China at 85MMT. Overall, world stocks increased by 0.2MMT to 95.4MMT (down from 109.7MMT last year).

UK Maize prices have risen by £3 and Ex store Rapemeal has firmed by £2 through the Winter. CBOT corn fell for the 6th straight day to a 6-week intraday low close.Wheat prices in the UK are extending gains to reach new season highs as wet weather continues to impede planting progress.Chicago reacted firm on the news that China confirmed that it agreed with US to roll back tariffs on each other’s goods in Phases.The US$ was consolidating after surging to a three-week high on Thursday in response to growing confidence that the economically damaging tariffs enacted by the U.S. and China on each other’s products will be reversed. A surprise dovish shift at the heart of the Bank of England’s (BoE) MPC raised a few eyebrows Sterling retreated to $1.28..

There is wheatfeed available  ex store Teignmouth from December onward. Prices of Rapemeal ex store have adjusted in both directions. UK Maize prices are lower by £2. CBOT grains were mostly muted after a firm overnight session with traders awaiting further news from a potential US-China trade deal. In a choppy trading session, bean futures closed practically unchanged.Dec meal closed at $308.60 (up $1.70) while Dec oil finished at 30.58 cents/pound down 0.27.Sterling consolidates around the $1.29 mark as European leaders discuss whether they should extend the Brexit deadline and by how much.

We have had a flurry of buyers taking cover this afternoon on the back of lower prices due to a stronger Pound. CBOT has traded higher so slightly up from the lows.

11.10.19 The prospect of a deal has caused a surge in the value of Sterling this has had am immediate effect on prices in the UK Soya meal and Rapemeal are markedly lower. CBOT corn fell 14¢ on a bearish US crop report and low export sales. US wheat futures ended lower following a USDA report which raised both US and world stocks from last month, with non-China world stocks up over 4 MMT on last year.CBOT beans bounced 10¢ following the USDA report, then gave it all back into the close on slumping corn and uncertainty surrounding the US/China trade talks, but are 10¢ higher again on the overnight session following last night’s much more optimistic comments from Trump.Oil prices jumped after an Iranian-owned oil tanker was struck by two missiles off the Saudi port of Jeddah.

UK Soyameal initial levels show a rise of £4 Ex store Rapemeal is £2 higher, Maize is up £1 across the Winter positions today.Grains turned higher in the afternoon on both sides of the Atlantic due to the arrival of heavy snowfall in parts of the Northern US Plains and Canada, leading to Spec Fund short covering. Wheat rallied 5-11¢ amidst fund buying.Beans and meal settled higher in Chicago – Nov beans closed at 920.50 cents/bu (up 5.25 cents), Dec meal finished at $306.90 (up $4.80), oil futures settled in the red. Concerns about slow harvest progress and unfavourable US harvest weather conditions. The Fed is to continue buying treasury bills to avoid another liquidity crunch in the US money markets this helped the US dollar Sterling dipped to $1.2195 after Boris Johnson accused Angela Merkel of making a deal ‘essentially impossible’. There is talk of an alternative to the backstop being offered by the EU.