Market Report 12th April 2019
Markets continue to trade recent ranges with USDA S&D data largely as expected.
World corn ending stocks raised 5.5mmt to 314mmt, above trade estimates. World production also increased 6mmt – mostly due to increases in South America.
World wheat ending stocks also raised 5mmt to 275.61mmt, 4mmt above trade estimates.
Sovecon increase Russian wheat crop estimate for 2019 to 83.4mmt, up from 80mmt previously.
UK customs data shows over 1.9mmt maize imported to the end of February this year. 2mmt imported over the whole of last season.
US funds estimated net short -290k (corn), -70k (soybeans), -105k (ch + ks wheat).
US weekly export sales: 548k (corn), 273k (wheat). Well under levels needed to reach USDA targets.
Egypt’s GASC buys four cargoes of wheat (Romanian/Ukrainian Origin). US offer not competitive. 6.55mmt bought so far this season, compared to 6.88mmt in total last season.
Algeria also reportedly buys 330tmt wheat, EU origin for June shipment.
CONAB estimate Brazilian corn at 94mmt, up from 92.8mmt previously. Increase down to larger expected area. Some trade ideas range from 95-100mmt this season with growing conditions excellent. (USDA 96mmt).
US HRW areas hit with colder than normal conditions for this time of year. Wet conditions for the SRW area remains problematic.
UK winter crops widely reported to be in excellent condition with spring plantings largely completed on time and in good order.
EU/FSU crop conditions remain benign according to local reports – prompting suggestions of a large rebound in production next season.
Markets continue to trade within recent ranges absent fresh fundamental news.
US markets largely focused on spring weather as well as political developments re. the China trade negotiations. Presence of the large accumulated US fund short supportive - though trade perception that old crop wheat supply is ample, acting to curtail upside.
UK/EU markets appear centred around old crop wheat trading dynamics as well as the impact of political/currency developments. Fundamentally the EU grain outlook is little changed.
Typically April is seen to be too earlier for significant weather events, though the US situation will be monitored closely. In short, failing key political movement re. US/China/Brexit – expect more sideways trade in the interim to summer.