Wheat market closes higher on Russian tensions
Beans closed higher, reversing the overnight trend, on what looks like short-covering ahead of next week's USDA report. "Fresh sabre rattling by Putin along the Russia/Ukraine border" as Benson Quinn put it will also have been a contributory factor. Shandong Sunrise Grain were said to have estimated China’s 2014/15 soybean import requirements at a very large 78.0 MMT. That's 5 MMT above where the USDA currently sit and 9 MMT more than in the previous year.
Yesterday's relatively low Informa estimates of a 2014 US soybean yield of "only" 44.5 bu/acre and production at 3.7 billion bushels may have added a bit of support too today. Brazil's Conab are out with their latest crop production estimates tomorrow. The latest weather forecasts for the Midwest are less wet today than they were yesterday. "The long-range forecast for rainfall is near normal August 11-15. Above normal would be better for replenishing dry fields," said Martell Crop Projections. Aug 14 Soybeans closed at $12.37 1/4, up 14 1/2 cents; Nov 14 Soybeans closed at $10.80, up 14 1/4 cents; Aug 14 Soybean Meal closed at $388.80, up $6.60; Aug 14 Soybean Oil closed at 35.78, up 31 points.
The corn market closed higher on what also looks like short-covering ahead of next Monday's USDA report and in the wake of heightened nervousness over Russia's intentions on Ukraine. Support also came from the USDA announcing 160,000 MT of US corn sold to Colombia for 2014/15 shipment. Talk that Argentina has stopped issuing corn export licences was also friendly. New from the US Energy Dept that ethanol production fell by more than 50k barrels/day last week was not however.
The trade is now weighing up Russia's move to ban the import of "certain kinds of agricultural produce and raw materials and food products" emanating from countries that have imposed sanctions against them. They didn't specifically say which products or which countries they mean, but it's probably not very hard to guess. Russia buys fruit and vegetables from the EU worth an annual EUR2 billion and food and agricultural products from the US worth around EUR1 billion a year, according to the BBC. Fund money was estimated to have been a net buyer of around 7,000 corn contracts on the day. Sep 14 Corn closed at $3.63 1/4, up 7 cents; Dec 14 Corn closed at $3.74 1/4, up 7 cents.
The wheat market closed sharply higher on a combination of short-covering and possibly fresh speculative long positioning on the back of increasing tensions between the West and Russia.
Reports of quality damage to the European wheat crop this year was also supportive. Talk of a possible embargo on Russian wheat would certainly be friendly for demand for US origin grain should it come off. It's probably unlikely to meet with wholesale support though. I just can't see the likes of Egypt refusing to buy from Russia, especially with Europe maybe not able to offer the volume and quality that they are looking for, and US wheat several thousand miles away. Iraq bought 50,000 MT of Black Sea origin wheat for August shipment. The Philippines are looking for 100,000 MT of feed wheat for Dec-Jan shipment. Fund money was estimated a being a net buyer of around 5-6,000 Chicago wheat contracts on the day. With all the uncertainty regarding Russia and the EU's quality problems the market appears to be thinking "do we really need to be at 4-year lows?" Sep 14 CBOT Wheat closed at $5.67 3/4, up 15 1/4 cents; Sep 14 KCBT Wheat closed at $6.56, up 13 1/4 cents; Sep 14 MGEX Wheat closed at $6.44, up 14 3/4 cents.
No comments posted yet. Be the first to post a comment
Please enter your name
Please enter your comment
Your comment submitted successfully.Please wait for admin approval.
Some error on your process.Please try one more time.
The permanent eradication of Bovine Viral Diarrhoea [BVD] in Scottish cattl...
The abolition of milk quotas in Europe on 1st April has resulted in a numbe...
The top 14 milk producing countries in Europe will increase their productio...
Matt Ware is the NFU's head of government and parliamentary affairs, based ...
There is a 'desperate need' to improve farmgate returns given low incomes a...
Rapid stem extension, after a slow start to spring, is likely to create spl...
The time has come for landlords to expect to see reductions in farm rents, ...
Cogent’s reputation as a source of the highest calibre sires has been enhan...
The spread of exotic and aggressive strains of a plant fungus is presenting...