TMMF Ltd
Farminguk
30 August 2016 | Online since 2003
OvoConcept


5 March 2014 01:51:14 |

Wheat market jumps higher over Ukraine crisis


Soycomplex
Beans closed mixed, after trading sharply higher in earlier overnight trade. That seems to have been linked to the unwinding of long beans/short corn/wheat spreads once the open outcry session began. Everything was firmer across the board to start the day, as tensions in Ukraine were ratcheted up a few more notches over the weekend. Stocks across the world fell, but grains, gold and crude rose as Russia seized control of Crimea and issued an ultimatum to Ukraine forces in the region to surrender of face assault.
Although Ukraine is a soybean and rapeseed grower, it is of course far more active in the corn and wheat market, which may also help explain today's price action. Weather concerns in South America remain, with IMEA cutting it's forecast for the soybean crop in Brazil's leading Mato Grosso state from 26.88 MMT to 26.39 MMT, with yields seen falling 1.8% to 53 sacks/ha.
Some farmers are harvesting beans at 20% moisture in between the showers, meaning that they also face significant drying costs, something for which there is a lack of capacity in the region. This apparently means that there are long lines of trucks of beans queueing at elevators in the region capable to drying beans, further stretching out the harvest and causing more logistical problems. Weekly export inspections for beans were 984,181 MT versus 1,312,679 MT last week and expectations of 1.0-1.2 MMT. There's talk that a major port in northern China has been forced to stop unloading soybeans after running out of capacity at its storage facilities.
Fund money was estimated as finishing as a net seller of around 4-5,000 soybean contracts on the day. Mar 14 Soybeans closed at $14.07 1/4, down 7 cents; May 14 Soybeans closed at $14.09 1/4, down 4 3/4 cents; Mar 14 Soybean Meal closed at $461.30, down $6.60; Mar 14 Soybean Oil closed at 42.11, up 59 points.
Corn
The corn market jumped around 6-7 cents, although that close was well off the intra-day highs on short-covering and spec buying following weekend events in Ukraine - set to be the third largest corn exporter in the world after the US and Brazil this year. The USDA announced 140,000 MT of corn sold to South Korea for 2013/14 delivery.
They also said that 211,500 MT of US corn had been sold to Japan, comprising 47,000 MT for 2013/14 shipment and 164,500 MT for 2014/15 shipment. Agritel said that Ukraine had shipped 500 TMT of corn last week. That may change this week, we will have to wait and see. They estimated that Ukraine still has a further 5 MMT of corn left to ship in 2013/14. Regardless of what is going on in the region, spring plantings are said to be underway in both Russia and Ukraine.
Talk of Western sanctions against Russian aggression may take the form of an embargo on imports of Russian corn and wheat possibly? China are reported to have rejected 887,000 MT of US corn since November due to the unapproved GMO strain MIR 162. Fund buying was estimated by some to be as high as a net 20,000 contracts on the day today. Brazilian rains that are slowing the soybean harvest will also be having a negative impact on safrinha corn plantings. Weekly export inspections of just over 1 MMT were above trade expectations and above what is required to hit the USDA's target for the season. Corn planting for the new 2014 season is underway in Texas, with 8% of the crop now in the ground versus 3% last week and 14% this time a year ago. Rumours persist from Friday that the EPA may soon revise upwards the ethanol mandate to come in near 13.5 billion gallons. Mar 14 Corn closed at $4.64, up 6 1/2 cents; May 14 Corn closed at $4.70 1/2, up 7 cents.
Wheat
The wheat market shot higher on the news that the Ukraine crisis had stepped up a gear over the weekend. Wheat in Chicago is the only agri-commodity left that fund money is short of, even if they have reduced that short quite dramatically since the turn of the year. That may help explain why wheat led the rest of the market higher today. Ukraine is just about sold up on wheat for 2013/14 it would seem, although they may have up to 3 MMT of wheat sold and as yet unshipped, according to Agritel. Russia however remain an active seller, as was witnessed in last week's Egyptian tender. Some form of Western sanctions against Russia may include an embargo on wheat imports.
That could mean more business for the US and Europe, although I'm sure that China would probably be first in the queue to "help" Russia by increasing its purchases of wheat and corn from them. That's wheat and corn that they would otherwise have bought from the West, so an embargo could be something of a two-edge sword. There's some talk that Canadian growers are struggling to get their bumper 2013 wheat crop onto the cash market.
This means that some are struggling for the funds needed to purchase inputs for 2014 spring plantings, it is being mooted. Logistical problems, added to by extremely cold weather are forcing the Canadian railways to operate shorter trains running at slower speeds, continue to restrict the movement of grains. This could ultimately have a negative impact on spring plantings some suggest. Weekly export inspections for US wheat were 609,867 MT versus 482,430 MT a week ago. Mar 14 CBOT Wheat closed at $6.26 3/4, up 27 3/4 cents; Mar 14 KCBT Wheat closed at $7.01 1/4, up 24 1/4 cents; Mar 14 MGEX Wheat closed at $6.95 3/4, up 25 cents.

Download

0 Comment

loginuserlogo
Name

Please enter your name


Email

Please enter your email

Please enter valid email


Comment

Please enter your comment


Post Comment

Your comment has been submitted successfully. Please wait for admin approval.


Comments

No comments posted yet. Be the first to post a comment


Thailand | 30 August 2016
Overworked Agriculture minister wants a deputy

Agriculture Minister Chatchai Sarikulya has confirmed he wants a deputy minister appointed to share the growing workload at the Ministry of Agriculture and Cooperatives. Gen Chatchai said this when...


USA | 30 August 2016
Washington state begins killing wolf pack for preying on livestock

Wildlife agents authorized to eradicate a group of 11 wolves for repeated attacks on cattle in Washington state have hunted down and killed six animals from the condemned pack and are searching for th...


Ireland | 30 August 2016
Farm bodies clash on EU dairy package

The IFA and ICMSA have clashed on how a new €22m support package for the dairy sector should be spent. While IFA has suggested that the aid package be used to guarantee low interest farmer loans, I...


Australia | 30 August 2016
Beef soon to become a 'luxury item' as prices skyrocket

For many Aussies, splurging on a ribeye may be a thing of the past, as a global beef shortage has sent shockwaves through meat markets, sending menu prices soaring and diners out the door. Since th...


USA | 30 August 2016
In drought, drones help California farmers save every drop

A drone whirred to life in a cloud of dust, then shot hundreds of feet skyward for a bird's-eye view of a vast tomato field in California's Central Valley, the nation's most productive farming region....



Trending Now

Viewed
Discussed


Top stories you may have missed
FarmingUK
FarmingUK Logo

FarmingUK

A new survey has revealed that the vast majority of British consumers belie...


FarmingUK
FarmingUK Logo

FarmingUK

The British public are overwhelmingly in favour of keeping or strengthening...


FarmingUK
FarmingUK Logo

FarmingUK

The sustained recovery of pig prices since the spring has come at a time wh...


FarmingUK
FarmingUK Logo

FarmingUK

A World Trade Organisation (WTO) panel has declared the Russian import ban ...


FarmingUK
FarmingUK Logo

FarmingUK

A new study has linked oilseed rape crops grown from neonicotinoid-treated ...


FarmingUK
FarmingUK Logo

FarmingUK

Philip Hammond is to guarantee billions of pounds of UK government investme...


FarmingUK
FarmingUK Logo

FarmingUK

Access to the foreign labour market is 'critical', according the chief exec...


FarmingUK
FarmingUK Logo

FarmingUK

The Tenant Farmers Association has said the National Trust's vision for a p...


FarmingUK
FarmingUK Logo

FarmingUK

Ulster farmers will 'not lie down and wave the white flag' when Brexit nego...


FarmingUK
FarmingUK Logo

FarmingUK

The cost of rural crime to the UK economy costs £42.5 million a year, accor...


closeicon
Username
Password