Markets close higher after a volatile week. US/China’s trade war escalation prompted sharp selling, before attention returned to problematic US wheat/corn and SA forecasts later in the week.
China announces intention to levy reciprocal tariffs of 25% on 106 US products, including soybeans, leading to a sharp sell-off (down $18/t at one stage). $100 billion of further tariffs is reportedly being considered by the US in retaliation.
US funds estimated net short 61.6k wheat, long 200k (corn) and 134k (soybeans).
EU soft wheat exports reported at 14.5mmt for the season (down 25% on the 19.4mmt shipped by this time last year).
Russian Ag Min suggest that they will not raise the wheat export duty for the 18/19 season – implying expectation of another strong export season.
Ukraine suggest they expect their 18/19 corn and wheat production to reach at least 24.1mmt and 26.1mmt, in line with this season, in spite of delays to spring plantings.
BAGE lower Argentine soybean crop estimate by 1.5mmt to 38mmt, down from last year’s 57.8mmt (USDA currently 47mmt). Corn estimate left unchanged at 32mmt.
Latest UK data shows animal feed usage up 24.7% on barley for this season to date. Wheat usage in animal feed reported up 2.6% for the season.
US Corn Belt forecasts cold/wet for the next 2 weeks – may cause delays to planting/field work.
US HRW weather continues to appear dry in the extended forecasts, with freezing temps also expected intermittently. Northern Plains temps expected to be well below normal for the next 2 weeks, with snow showers likely.
US winter wheat crop ratings placed at 32% g/e, 30% p/vp (compared with 51% g/e and 12% p/vp last year).
BAGE report Argentine corn harvest 21.6% complete (18% last week). 78.1% of the crop rated poor/very poor, up from 76.4% last week.
Argentine forecast show unfavourable rainfall for the next 10 days.
Central/Southern Brazil expected to remain dry for the next few weeks.
French wheat conditions rated 78% g/e, unchanged on the week (85% this time last year).
Australian wheat area remains dry with rainfall levels below average – potential for better moisture in the 7-10 day models however.
US/Chinese developments keep the trade on edge, with little clarity as to what the final outcome of the tariff trade-off will mean for Ag products as of yet. Principally the trade expects soybeans/corn to be more affected – though wheat would be expected to follow market direction.
Fundamentals wise, USDA’s latest stocks and plantings report is due on Tuesday, whilst US HRW dryness and Corn-Belt planting delays should continue to occupy much of the trade focus in the interim.
US/SA weather is likely to provide underlying support to markets if current forecasts materialise. In short, between US/SA spring weather, USDA reporting and geo-political developments - further volatility appears likely this week.