Crop Values Consolidate as Sales Data Supports Futures

August 18th, 2017


Category: Grains, Oilseeds

(Agrimoney) –  Wheat, corn and soy futures have all levelled in the US at the end of the week as traders take stock. This follows a sharp fall over the last week with large crop reports from the world’s major producing areas, especially last week’s WASDE upgrade to Russia’s prospects. But EU futures are still falling.

Nearby CBOT wheat futures are at $4.16 per bushel, up from the contract low of $4.14¾/bu, with December values 0.5% higher at $4.42¾/bu from Thursday’s low of $4.38¾/bu.

With the US winter wheat harvest complete, growers are now harvesting spring crops. Analysts say this will limit further crop damage, although yield prospects are down after the prolonged hot, dry weather in the growing season.

“Grain prices will trade largely sideways in the coming weeks as wheat harvests are nearly finished and weather conditions remain favourable for upcoming northern hemisphere corn and soybean harvests,” comments analyst BMI Research.

Corn up from 11 month low

While the corn harvest is still some way off, the CZ7 CBOT contract rose by 0.1% to $3.64¾/bu from the 11 month low of $3.63¼/bu it reached on Wednesday. USDA data showing corn export sales of 62,400 tons of old crop and 671,800 tons orders for new crop were described as “within trade expectations”.

The CBOT SX7 soybean contract was 0.2% higher at $9.35¼/bushel. USDA export data shows China buying a lot of old and new crop soybeans, with 1.35m tons committed. US soybean exports had been depressed in recent months in the face of the record Brazilian crop, but the demand from China is supportive to CBOT soybean futures. The US Soybean Export Council reported that Chinese importers had signed agreements to buy 3.8m tonnes of US soybeans, with a value of some $1.56bn, at a ceremony in Omaha, Nebraska on Tuesday.

The USDA Drought Monitor predicts “significant” rainfall across the corn and soya growing belt in the next two weeks, which will ais these crops, but “fair to good” harvest weather in the northern US Plains and Canada over the next two weeks as famers continue to harvest spring cereals.

European wheat values remain under pressure from the weaker global markets. The Matif September contract is 0.96% down to E155/tonne with the December contract 0.77% lower at E161.25/tonne.

Wheat quality concerns in EU

Trader Gleadell Agriculture, jointly owned by ADM and Invivo, notes that the harvest in France is virtually complete and its quality has improved. Delays continue in Germany, Poland and the Baltic and the UK, and concerns over quality in these countries are rising.

“The likelihood of more EU feed wheat and increased production in Russia and Ukraine are seen as negative to EU prices, although logistics may limit the total volume of Russian exports”, it notes. “Black Sea supplies again filled Egypt’s latest tender, with five Russian cargoes booked out of 15 offered. The solitary French offer was about $10/t too expensive.” The GASC tender attracted 295,000 tonnes of Russian wheat and 60,000 tonnes from the Ukraine.


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