Wheat markets trade sideways this week, as US corn makes new contract lows post USDA data, released late on Thursday.
USDA raise US corn yield estimates to a record 175.4b/a (174.6b/a last year). US carryover also raised 3.7mmt to 63.2mmt.
US corn demand remains strong for ethanol/feed/exports, though farmer selling is believed to be considerably behind normal.
Coceral place UK wheat crop at 14.79mmt, whilst Strategie Grain suggest 14.52mmt, significantly below DEFRA’s first estimate of 15.16mmt.
US funds estimated net short 129k wheat, 244k corn (near record).
EU Commission report wheat exports just over 7mmt to 7th November, 25% down on 2016. USDA estimate EU all-wheat exports at 28.5mmt for the season - appears too high on the current pace.
Sovecon increase Russian wheat crop estimate by 1mmt to 83.9mmt.
India increase wheat import tax from 10 to 20%. This is expected to largely impact Ukrainian exports intended for India – could consequently pressure international export markets lower as this wheat seeks an alternative home.
US corn harvest progress expected around 85% complete (70% last week). 7-10 day forecasts indicate largely unthreatening conditions for much of the Corn Belt.
Brazilian corn planting 49% complete (42% last week), whilst Argentine corn planting 65% complete (61% last week).
Argentine forecast look mild for this coming week, with scattered showers expected for Southern Brazilian growing regions.
Russian Ag Ministry report the grain harvest at 95% complete, whilst Ukrainian winter sowings are believed to be 95% complete and largely in good condition.
France AgriMer place winter wheat plantings at 90% (largely in line with the 5 year average).
Little bullish outlined by USDA in their latest update, with abundant supplies of corn/wheat evident Globally.
Northern hemisphere weather appears largely unthreatening for winter plantings, whilst SA harvest/plantings continue without major incident.
US fund shorts in corn/wheat are significant, though given the current bearish sentiment, it is difficult at present to identify the catalyst that would trigger major fund short covering.
On balance, failing a significant weather/currency event, markets may continue to feel pressure to erode, albeit gradually, over the coming weeks and months into the New Year.
Contact: GrainCo Ltd 0191 4287700