RSS
Twitter
Linked In
News In
Markets
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Weekly grain and oilseed markets view from Europe

Twitter Linkedin

All eyes are on La Niña and resulting weather in areas of Australia and Argentina which could impact global grain prices if winter crops are hit.

Oilseed prices have taken a blow in response to India’s decision to lift import tariffs on both crude and refined vegetable oils.

And the UK wheat market remains tight, but lower prices could be on the horizon.

 

What to watch

Russia’s major export expansion continues to weigh on the market.

May 2018 LIFFE wheat futures closed on Thursday, November 23 at £144.05 a tonne, a drop of £0.70 a tonne on the week

 

UK grain

 

UK physical grain prices show little change

 

Since our last report, the LIFFE exchange has been pressured lower by a combination of global weakness in grain markets and a slightly improved pound.

 

However, physical prices have showed little change, especially in the pre-Christmas positions, as the supply squeeze plus perceived seasonal logistics continue to support delivered markets.

 

Official data for the first quarter of 2017-18 (July-September) showed wheat exports down 78% year-on-year, while imports were just slightly higher, reflecting the apparent tightness in the UK balance sheet.

 

News that one of the major ethanol plants has pulled forward and extended its seasonal shutdown for maintenance will reduce demand, although again, this has exerted little pressure upon spot prices.

 

The timing of the plant’s reopening, if delayed, may affect the balance sheet, with evidence of more sellers in the deferred positions, although end-users continue to stay absent, expecting lower values.

 

The UK is not export competitive, but at present it does not need to be.

 

A major shift in supply (bigger crop) or a drop-off in demand could leave the market open to lower prices in the latter months of the season, although at present, it still remains unclear if the UK needs to move towards export competitiveness, or import parity.

 

David Woodland, Gleadell

 

 

Global grain

 

Speculators hold a record net short position on corn

 

The global grain glut and the supremacy of Russia regarding the wheat exports have continued to keep a lid on grain prices, although some activity from the funds was noticed last Friday when a rising risk of La Niña made the headlines.

 

The trade is eager to find any fresh bullish news to justify a rally after a prolonged period of low prices, which is likely to lead to a further reduction in the winter wheat planted area.

 

The rising risk of La Niña, generally translating into wet conditions across the eastern part of Australia and dryness in the core producing provinces of Argentina, could be the catalyst required.

 

It has reminded speculators that the world has become extremely dependent on the latter origin for soymeal - Argentina accounts for 15% of global production but nearly half of exports.

 

Although the weather forecast has recently improved in Argentina with a few wet episodes, the most critical period for corn and soybean yield is still ahead of us across South America.

 

As such, the speculators play a dangerous game holding a record net short position (bearish bet) on futures and options combined for corn, of more than 230,000 lots - equivalent to nearly half EU production.

 

Benjamin Bodart, CRM AgriCommodities

 

 

Oilseeds market

 

Oilseeds markets remain volatile

 

On Monday, the global oilseeds market awoke to news that, over the weekend India, the world’s largest importer of edible oils, had significantly lifted import tariffs on both crude and refined vegetable oils.

 

The news, albeit flagged ahead of the announcement, had an instant negative impact on palm oil prices in Malaysia, then in a follow-through move onto Euronext rapeseed futures some hours later in the global day.

 

In turn, UK rapeseed prices took a hit on Monday. Elsewhere, Canadian canola prices remain in an upwards channel, despite their current export pace seen likely to meet the forecast target for the season.

 

The Australian canola harvest is underway, although significant amounts of rainfall in the east will likely delay progress. South Australia looks dry for their key harvesting slot.

 

All-in, the world rapeseed balance sheet appears to have similar supply and demand profile to last season, albeit with slightly more demand pushing the stocks-to-use ratio to a sub-10% level.

 

UK ex-farm prices have hovered around the £320-a-tonne mark for most farmers in the last week, which is some improvement on levels of just a few weeks ago.

 

Basis remains in the £12-£16 ball-mark, which is not too shabby, relative to recent seasons, but some way off the sub-£10 numbers witnessed earlier in the season, before the pace of rapeseed imports started to pick up.

 

Rupert Somerscales, ODA

Twitter Linkedin
Related Stories

Gasc's Romania purchase offers false dawn over kicking Russia habit

The Egyptian agency’s first purchase of non-Russian wheat since August was down to rising shipping rates - which will end up favouring Russia even more

France cuts wheat export hopes, after slowdown in shipments to non-EU buyers

The EU’s top wheat producer lowers hopes for its export recovery, in part thanks to a downgrade to the latest harvest

Morning markets: Grains stage a recovery. Will it last?

Corn, soybean and wheat futures start Wednesday making headway which has been difficult to come by of late. Cotton gains too

Evening markets: ags overlook crumbs of comfort in Wasde to set fresh historic low

The Bcom ag commodity subindex ends at a fresh record low, as US export fears overtake upbeat interpretations of corn, cotton estimate revisions
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069