Market Report 11th January 2019
Markets largely lower this week, though fresh news thin.
US Government shutdown continues, as such, no new date for the release of the latest USDA report has been outlined.
Reports continue that Russian exporters have been asked to cut back on shipments for the remainder of the year. 9-10mmt wheat has been suggested, around half the amount exported during the same period last year.
US shares part of the latest Algeria wheat tender, providing some optimism for US markets. 415tmt Egyptian business still went to Black Sea origin - US freight disadvantage pricing them out.
GASC season to date purchases total 5.17mmt. Trade perception that a further 1.5-2mmt in wheat will be needed before the end of the season.
French Farm Ministry lowers soft wheat export projection by 100tmt, increasing ending stocks to 2.3mmt. Rising concern that exports will not accelerate as expected in the second half of the season due to FSU supplies.
Brexit vote in House of Commons on Tuesday will be the focal point for UK markets this week. If the deal is voted down as expected, the Government would have 3 days to come up with a ‘Plan B’ to put then before parliament again.
US/China trade talks ongoing, though latest reports suggest progress has been made on Ag and Energy trade issues.
US funds estimated net long corn (125k), long soybeans (13k) and square wheat.
WEATHER/CROP DEVELOPMENT
Continued suggestion that US farmers may have planted a record low winter wheat acreage.
Damaging wet weather in Argentina continues to undermine wheat crop prospects.
BOTTOM LINE:
Little new fundamental news to report his week as the trade awaits updates on a number of political issues.
Global grain markets are focused upon the US/China negotiations as well as the US Government shutdown, which continues to delay USDA reporting.
Likewise domestically Brexit continues to dominate with the next ‘all important’ vote on Tuesday likely to shape Sterling and consequently set the tone for London wheat. Due to the all political/economic uncertainty, trade buying and selling has slowed.
Expect volatility this week with politics/currency likely centre stage.