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PM markets: Russian wheat prices rise with the rouble

26 января 2017 года

Soybean futures fell for the third-straight session, after unexpected weekend rains in Argentina, while wheat futures rose on a weaker dollar.

The new US president Donald Trump on Monday signed an executive order withdrawing from the proposed Trans-Pacific Trade Partnership (TPP), which would have reduced barriers to trade with many economies, including Japan, Australia, and Malaysia.

The scrapping of the deal, which was never ratified by the US Congress, was widely expected.

"It could be negative long-term if additional bi lateral agreements do not occur," said Darrell Holaday, at Country Futures.

Of more pressing interest will be just how far Mr Trump will go to renegotiate the 17-year old North American Free Agreement, with TPP countries Canada and Mexico.

The dollar reached down some 0.4%, to a six-and-a-half week low against a basket of world currencies.

Rains help southern Argentina

Soybean prices came under further pressure, as the closely-watched weather situation in Argentina improves.

"Soybeans caught a wave of selling as the benefits of unexpected rains over the weekend in southern soybean growing areas of Argentina offer resistance," said Brain Henry, at Benson Quinn Commodities.

"These rains will benefit many areas that have struggled with a drier weather pattern for the last couple of months," he said.

Weak exports, heavy speculative buying

"The trade also took note of another sizeable increase in the net long soybean and soy meal positions held by the funds," Mr Henry said.

Weekly data from the US CFTC showed speculators boosting their net long positions sharply in both commodities.

Weekly US soybean export expectations were somewhat underwhelming, at 1.29m tonnes.

March soybean futures settled down 0.7%, at $10.60 a bushel.

Russian wheat need new buyers

Russian agricultural consultancy SovEcon said the country will have to find new markets for its grain exports, in order to ease pressure on the domestic market after a record crop.

SovEcon said that Russia's traditional markets of North Africa and the Middle East would not provide enough demand for the record crop.

Russia's December grain exports fell to 870,000 tonnes month-on-month, to 3.18m tonnes from 4.05, thanks to weather disruptions and the stronger rouble, and are expected to fall to 2.4m tonnes in January.

SovEcon separately saw wheat at Russian wheat prices $183.5 a tonne, up $1.5 from last week.

Ikar, another Mosco-based consultancy, reported Russian wheat prices up $2 a tonne from last week, thanks to the stronger rouble, at $185 per tonne.

No major frost-kill in Europe

European crops saw only slight frost damage, despite the recent cold spell, the European Commission's crop monitoring body Mars said.

South-eastern Europe, Hungary and Slovakia saw exceptionally cold weather over the first half of January.

But Mars said that crops were able to develop crop tolerance ahead of the freeze, which prevented widespread damage.

"Frost damages have been relatively minor so far, and, in accordance with the latest weather forecast, no further frost-kill damages are expected between now and the end of January," Mars said.

And snow cover protected winter wheat from damage in Belarus and Ukraine, Mars said.

US export expectations for wheat came in below expectations, at 276,200 tonnes.

March Chicago wheat futures settled up 1.2%, at $4.33 ¼ a bushel.

Falling Chinese demand

US corn exports inspections were strong, at 963,900 tonnes over the last week.

But China's corn imports were down by 33% in 2016 to 3.17m tonnes, customs data showed.

Chinese corn demand is under pressure thanks to the lower domestic corn price, which is also reducing demand for corn substitutes.

Barley imports were down 53%, to 5.0m tonnes, with sorghum imports were down 38%, to 6.65m tonnes.

March corn futures finished the day unchanged, at 3.69 ¾ a bushel.

Indian imports on the cards?

Raw sugar futures rose in New York, thanks to continued idea of a smaller Indian crop, which could force imports.

Green Pool cut its estimate for the Indian crop by 1.0m tonnes to 20.5m tonnes.

"Most analysts including ourselves, think the crop will be slightly above 21 million tons, that stocks may be a little lower, and consumption a little higher than the government's figures," said Robin Shaw, at Marex Spectron.

"In this case imports will be needed."

March raw sugar futures settled up 2.3%, at 20.64 cents a pound.

Indian rupee recall effect

Cotton prices surged as well, after evidence of the disruption the demonetisation of high-value rupee notes caused to Indian markets.

Cotton supplies in Indian spot markets fell 15.9% year-on-year, to 10.8m bales between October and December, the Cotton Association of India said.

March cotton futures in New York rose 2.3%, to settle at 74.63 cents a pound.

Attention on Brazil

And arabica coffee futures also rallied, helped by the weaker dollar and fears over Brazilian production.

"There is more talk about less production this year in Brazil in part because of the drought in Espírito Santo and in part due to the fact that it is the off year in the biennial production cycle," note Jack Scoville, at Price Futures.

March arabica coffee futures settled up 1.4%, at $155.40 cents a pound.

March robusta coffee trimmed Friday's multi-year highs, to settle down 0.6%, at $2,248 a tonne.

http://agrimoney.com/

Source: Agrimoney.com  |  #grain   |  Comments: 0   Views: 78

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