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Morning Markets: Soybeans climbing as wheat and corn stall

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Monday’s trading saw Chicago wheat unchanged while corn lost ground and soybeans gained slightly. But these positions had changed early Tuesday as wheat dropped while corn and beans rose – the latter sharply.

 

The day’s trading saw funds neutral in wheat; net sellers of 10,500 lots of corn; but net buyers of 1,000 lots of soybeans.

 

The Chicago May SRW wheat futures gained slightly over Monday’s trading, opening the day at $6.27 a bushel, and closing it 25 cents higher. However, early trades had seen the contract drop to $6.25¾/bu, and Tuesday morning trades were down to $6.23½/bu.

 

The continued trend downwards in the wheat market from its peak in December 2020 reflects a growing confidence in the yield prospects for new crop wheat across the Northern Hemisphere. CRM Commodities reports a reduction in the number of long positions held by managed money – the current number of 85,049 long contracts is the smallest long position so far in 2021.

 

In Europe, the Paris milling wheat contract lost €1 to end Monday at €218.75/tonne. It said this reflects reduced European export activity, with a lack of competitiveness from French wheat.

 

EU wheat exports fall

 

European Commission data shows that by March 21st the EU had exported 19.34 million tonnes of wheat to third countries since July 1st 2020, down from the 24.65m tonnes at the same stage of the previous marketing year. Barley exports totalled 5.51m tonnes in the year to date, from the 5.66m tonnes twelve months earlier.

 

Spring sowing activity in Russia is behind last year’s rate, reported analyst Agritel. Up to last weekend, Russian growers had sown 221,000 hectares of spring crops – mostly in the southern regions - down from the year ago figure of 926,000ha.

 

The analyst added that 4.5 million ha had received a dose of nitrogen fertiliser (8.8mha last year) – about a quarter of the winter crop area has received a first application compared to almost half at the same stage of last year.

 

The CBOT May corn futures lost ground over Monday’s trading. The position had opened at $5.57¾/bu only to close the day’s business at €5.49/bu. Early Tuesday pre-trading saw it slightly up at $5.49¾/bu.

 

Chinese appetite for US corn

 

The confirmation of almost 3.9 million tonnes of US corn sales to China last week has raised speculative interest in corn futures – analyst CRM reported that managed money increased its number of long positions in corn to 385,000 contracts, the largest overall net position since 2014.

 

The Euronext futures saw a €0.25 gain over Monday to end the session at €215.50/tonne.

 

Agritel noted that the corn market is steady, supported by a tight world supply and demand balance and buoyant Chinese demand. But European corn imports are down from last year’s level at 11.38m tonnes (15.62m tonnes at the same point of 2020).

 

Soybeans had a quiet Monday, adding $1¼/bu over the day’s trading to finish at €$14.17½/bu. However, early Tuesday business saw the position up to $14.24/bu.

 

There is tension in the soybean sphere between tight US stocks after the resumption of exports to China on one hand, and the increasing availability of South American origins on the other. CRM reported little change in the long positions held by managed money funds, but an increase in the number of short positions, which it said points to easing global availability and new soybean crop confidence.

 

Biden calls for more veg oil biofuel

 

In Europe, the MATIF oilseed rape futures lost €2/tonne to end the day at €513.00/tonne.

 

Agritel noted EU rapeseed imports are above the previous year’s level at 4.87m tonnes (4.82m tonnes) and are on course to reach 6.5m tonnes for the full 2020/21 marketing year.

 

The analyst observed that palm oil is performing well in this start of week due both to good export business and US president Joe Biden’s expression of support for a higher vegetable oil usage in biofuel manufacture. This is supportive to rapeseed on top of the trend upwards in soy and canola oils.

 

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