Market Report 5th October 2018

October 10, 2018

Buy the rumour sell the fact this week as Russian export concerns circulated on Tuesday before being dispelled the next day, prompting markets to give back gains.

  • Reports on Tuesday emerged from a Russian Ag Safety Group that up to 30 grain loading points in two of Russia’s main producing regions could be suspended.

  • Trade suggestion that this was perhaps as a result of quality concerns. On Wednesday it was confirmed that no shipments would be stopped.

  • Egypt’s GASC buys another 180k Russian wheat. Few signs of Russian availability easing as of yet.

  • Russian Jan-Aug customs data revealed wheat exports of 27.8mmt (up from 16.7mmt in the same period in 2017).

  • French customs data showed wheat exports outside the Union at 1.52mmt July-Aug (up 23% y/o/y).

  • USDA attaché in Ukraine estimates corn production at 29.5mmt, versus 31mmt reported by the USDA recently. Export est. of 22mmt also 3mmt below official forecasting.

  • Buenos Aires Grain Exchange estimate 2018/19 Argentine wheat crop at a record 19.7mmt, up 9% on last year.

  • Informa increase US corn yield estimate to 182.1b/a, up from 178.8b/a (Sep USDA 181.3b/a).

  • US funds estimated net short -67.4k (corn), -43k (soybeans), -11.7k (ch wheat), long 22.8k (ks wheat)

WEATHER/CROP DEVELOPMENT

  • US corn harvest progress estimated around 35% complete, up from 26% last week. Excessive rains remain in the forecast for much of the Corn Belt.

  • Heavy rains for US HRW areas expected to slow planting progress. Though they should benefit the crop planted to date.

  • EU winter crops reportedly struggling with dry conditions. Little rain appears to be in the forecast for the next 2 weeks.

  • Australian forecasts show better rainfall, but trade perception remains that this is likely too little too late.

  • Cold/snowy weather continues to restrict the Canadian harvest progress.

BOTTOM LINE

  • Little significant fundamental change to report on the week as markets continue to trade within recent ranges.

  • Trade perception remains that leadership in wheat needs to come from the Black Sea if markets are to break meaningfully higher and, as yet, this has not been evident. US forecasts will be closely monitored with conditions less than ideal for corn harvesting and little margin for error built into USDA’s yield calculations.

  • Focus this week will likely be on USDA’s latest S&D report, due this Thursday 11th. Currency/geo-politics may provide the default for direction in the interim.

     

     

     

     

     

     

     

     

     

 

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