Weekly grain and oilseed market view from Europe


In the UK, heavy supply for the old crop season has restricted wheat values as they struggle to keep up with the rallies seen overseas.

Demand from millers has not picked up in the new year, meaning premiums have softened.

And, although a bearish US soybean report was released last week, the major catalyst of the market has been the deterioration of the Argentine crop due to dry weather.

What to watch

Fewer wheat exports could be needed than first thought to limit a huge build up in European Union stocks, with buoyant feed demand on the continent.

May 2018 London wheat futures closed on Thursday, February 15 at £139.70 a tonne, a rise of £1.70 a tonne on the week.

European grain

What goes up must come down

In the aftermath of the monthly US Department of Agriculture Wasde report released on February 8, Paris Matif wheat found strength to reach its technical resistance of E161 a tonne on the March 18 contract but it was still unable to break through it.

The weakening euro, which posted its worst weekly performance of -1.8% against the US dollar since November 2016, also lent support to euro-denominated contracts.

Fundamentally, the pace of EU wheat exports remains sluggish with only 12.6m tonnes exported so far this season or 18% down year-on-year and as such, the upside potential could well be limited short-term.

Consequently, the USDA in the Wasde lowered its 2017-18 EU wheat export forecast by 1m tonnes to 26m tonnes, while FranceAgriMer this week cut its French non-EU wheat export target by 300,000 tonnes to 9m tonnes.

However, the recent weakness in the euro will likely improve the EU competitiveness and therefore lead to a pick-up in exports.

It is also important to note that the feed demand across Europe is very buoyant and as such the exports required to limit a huge build up in EU stocks could be less than first thought.

Coupled with a tight barley environment, the corn fundamentals could also become supportive for wheat, with ongoing concerns in Argentina, delayed plantings in Brazil and an expensive Ukrainian origin.

Benjamin Bodart, CRM AgriCommodities

Global grain

Global markets looking for certainty

Global grain markets remain stuck between a rock and hard place.

The desire for the US markets to pull themselves off contract lows and back to values not seen for many months is being met with a plethora of debates ranging from weather, currency, fund movements and even the odd advocate of “the end of the bearish run for grains coming to an end”.

Reality is that local domestic markets have been the key to most price moves all season. Who has grain, who needs grain and what quality do the buyers want and need?

With six months of usage data now processed and much more known about southern hemisphere crops and winter plantings in the north, traders need to be happy with their balance sheets before they embark on the next trading position in a marketplace which has so far this crop year failed to be financially overly generous.

The arrival of various carnivals and holidays is buying time but the markets are looking for something concrete and in a world of uncertainty it may be some time before it turns up.

Cecilia Pryce, Openfield

Oilseeds market

Dry weather in Argentina fuels oilseeds market

Although a bearish US soybean report was released last week, the major catalyst of the market has been the deterioration of the Argentine soy crop due to dry weather.

That continues to fuel the market, with end-users and speculative buying spiking the meal market over $4 a tonne in just six sessions.

With limited rains in the forecast, and temperatures warming into the 90’s later in the week, further deterioration and crop losses are possible.

Funds have switched around their short soybean position, and with heavy fund buying this week, it is conceivable that funds will hold long beans and meal, but short oil positions, when the US Commodity Futures Trading Commission reports later on Friday.

Matif rapeseed and Canadian canola futures have seen minimal gains, as the strong euro limits the upside, with the only bullish input being the move on the Chicago bean market.

Asian markets continue to track the Chicago market, with both soybeans and soymeal higher, but vegetable oil – especially rapeseed oil – lower.

The market may take a pause with Friday’s start to the Chinese new year. But until the extent of Argentine losses are known, expect any major dips in the market to be snapped up, as Argentina normally accounts for just under one-half of the world’s soymeal trade.

With heavier-than-normal rains in Brazil disrupting harvest progress, crush margins in the US have firmed dramatically, leaving the likelihood that buyers may well, in the short-term, revert back to the apparently only open shop, the US.


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