Mild conditions have allowed Russia to retain its dominating export pace as winter is yet to arrive in the Black Sea.
The US oilseeds market has moved off recent highs as declines in oil markets continue to drag values lower.
What to watch
EU grains starting a recovery with North African countries.
May 18 LIFFE wheat futures closed on Thursday, November 30 at £142.25 a tonne, a drop of £1.80 a tonne on the week.
Are EU grains starting a recovery?
After hitting fresh contract lows earlier in the week, Euronext wheat futures bounced back amid a consolidating euro and a new round of purchases from North African countries, giving hope for higher European Union grain exports in the weeks ahead.
However, it is also important to note the winter is yet to arrive in the Black Sea and, as such, the unusually mild conditions allow Russia to keep exporting wheat at a record pace for this time of year, putting a lid on any attempted rally in prices.
Consequently, Russia continues to offer the cheapest wheat on the planet and Gasc [Egypt’s General Authority for Supply Commodities] could not miss this opportunity to book a further 120,000 tonnes on Tuesday - the seventh consecutive tender of Russian wheat exclusively.
Regarding the newly established winter crops for the 2018 harvest, Mother Nature has been relatively kind although dry areas in Spain and North Africa already pose a risk to wheat yields.
Elsewhere, the European Commission noted in its monthly Mars crop report that rapeseed was “worst affected” by abundant rain “in northern Germany, northern Poland and Lithuania… as its optimal sowing window has finished and a reduction in the planted area is expected”.
Benjamin Bodart, CRM AgriCommodities
Difference between physical and future grains disjointed
World markets continue to look for a new story
The markets have been very negative for so long as reports focus heavily on export business - or should that be “reported lack of export business”.
The desire to compare shipments with last year’s movements, rather than consider the current year on its own merits, seems to be a full-time occupation for many.
Global freight markets remain relatively firm but buyers are still trying to second guess Australian and Argentinean crop sizes and quality.
Much will hang on availability of milling grades, while feed grades will have to compete with maize as necessary.
With winter on its way in many northern hemisphere grain growing countries it will add more to conversations, but many will still be keen to understand how much maize may still be in fields in the Ukraine.
Markets could thin towards the holiday period, but with spot physical grains still hard to buy in many countries the difference between physical and futures grains may become more disjointed.
Consumers still need grain delivered every day and many traders will be worried about that rather than how the markets will look in six weeks’ time.
Cecilia Pryce, Openfield
US oilseed market slips
The US market has moved off the recent highs as declines in oil markets dragged values lower.
Talk of a slowdown in Chinese imports, due to a build-up awaiting GMO safely certificates at ports, was also noted as bearish.
Rain is forecast in Argentina, but the early December forecast brings drier conditions back into play.
Southern Brazil remains dry, but the rest of the country is experiencing good rainfall.
Matif rapeseed halted a recent run of down days, on a weaker euro and signs of support from a seeming stabilisation in vegetable oil markets.
A near three-week low in the Canadian dollar has helped canola markets post solid gains.
Asian markets have recently been trading lower, notably due to the recent slump in the oil complex, which, if continued, may leave the recent bounce in Matif and canola prices short-lived.
Malaysian palm oil is trading back at a four-month low as the ringgit raises to a 14-month high.
In summary, the trade will continue to concentrate on South American weather, US soybean export pace and Chinese import demand, as well as this week’s expected announcement on the US biofuel mandate, all which may in the long-term point to tightening US supplies.
David Woodland, Gleadell