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Market Report 8th February 2019

Markets close lower on the week, as USDA data largely underwhelms.

  • USDA report US winter wheat area at 31.3m/a, a new record low (32.5m/a last season). Trade expectations circa 32m/a. In spite of this, US supplies are still anticipated to be ample next season with end of season stocks only expected around 3mmt lower.

  • US corn yield lowered to 176.4b/a (178.9b/a prev.). Amounts to one of the largest ever changes from a Nov to Jan report.

  • Impact on US S&D limited however as corn feed/ethanol usage estimated down circa 3.8mmt.

  • Egypt’s GASC buys 300tmt wheat, split between US, French, Ukrainian origin. US offers notably cheapest. Best Russian c&f offers $4/5/t higher.

  • EU wheat exports to Non-EU destinations remains down 26% year on year.

  • US funds estimated net long 70k (corn), 5k (soybeans), and short -25 k (ch + ks wheat).

  • France AgriMer increase end of season stocks by 100tmt to 2.9mmt. Although exports were seen higher, this was offset by a reduction in domestic feed usage.

  • DEFRA Basic Payment Scheme flags up some major differences in English cereals planted areas relative to their June report. 2018 English wheat area estimated at 1.56m/h, 108,300h lower than previously forecast. If correct, would take circa 800tmt wheat from the UK balance sheet.

  • English spring and winter barley areas similarly placed below previous reporting – down 4.21% and 5.52% respectively.


  • US freezing temps remain of concern – though snow cover is reportedly widespread.

  • EU/FSU winter crops in good condition – though some suggestion soil moistures are low in some Black sea regions.

  • UK winter cereals remain anecdotally reported in excellent condition.


  • USDA reporting came and went with adjustments to US/Global S&D’s more modest than anticipated.

  • Market attention would now appear likely to revert back to politics – more specifically, US/China talks from a Global standpoint and Brexit from a domestic one. Pace and structure of the wheat export market will also remain closely watched as US/EU seek to offload stocks, absent competitive Russian offers. UK trade may also take time to digest the new BPS data and any potential impact on the old crop balance sheet.

  • Expect more of the same as we progress towards spring when weather/crop development etc. should regain some of the focus. In the lead up - risk of volatility remains in light of all the geo-political context.

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