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Market Report 8th March 2019

March 12, 2019

 Slide continues as USDA’s latest report provides little supportive to alter current sentiment. USDA headlines

  • US wheat export estimates reduced by 960tmt to 26.26mmt. Due to increases in imports and reductions in consumption, ending stocks were placed at 28.72mmt, over 1mmt above trade estimates.

  • US corn exports also reduced by 1.9mmt to 60.33mmt. Ending stocks increased by 2.54mmt to 46.62mmt.

  • EU wheat exports raised by 1mmt to 23mmt, despite the trade anticipating a decline. EU wheat ending stocks reduced as a result by 800tmt to 10.43mmt after slight adjustments to consumption and imports.

  • Russian wheat production estimate raised by 900tmt to 71.69mmt (harvest time private estimates as low as 60mmt at one stage).

  • Global wheat ending stocks raised by 3mmt to 270.53mmt, down only 3% on last season’s record.

  • US funds estimated net short -193k (corn), -47k (soybeans), -120k (wheat).

  • UK maize usage in animal feeding reported at 58.8tmt for January, up 134% on last season. Barley usage of 74tmt however at its lowest since 2012.

WEATHER/CROP DEVELOPMENT

  • Cold, winter weather continues to be of concern to US growers, with speculation mounting that the corn crop will not be planted on time.

  • South American growing conditions reported to be very good, with above average yields already anticipated.

  • UK spring cropping well ahead of normal with large areas of England and Wales already reportedly finished. Colder weather forecast may delay completion of sowing further north

BOTTOM LINE:

  • Market erosion continues as a lack of positive input leaves the path of least resistance lower for grains.

  • In short, World market weakness can be attributed to a lack of progress re. US/China trade talks, continued lacklustre pace of US/EU exports and an absence of any real Global weather story. US funds have built large spec shorts in corn and wheat over the past few weeks, offering some underlying technical support - though, until there is some movement in the aforementioned areas, markets may struggle to build any momentum.

  • UK trade remains fixed on Brexit developments with a number of critical votes expected in Parliament this week. Physical market dynamics are unchanged.

  • Given politics locally and globally is the central theme - further volatility is difficult to discount until April.

     

     

     

     

     

     

     

     

     

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