Daily market report
16th November 2017
US wheat futures were under pressure yesterday closing down on the day. US export inspections for this week were 301,000mt which means the cumulative total is down 6% on last year. On top of this there is confusion over Egypt’s import terms after the court banned imports of wheat infected with ergot on Tuesday. Egypt’s supply Minister has said they have stocks to last until early April. However, they are obliged to hold stock to carry them through six months at any one time so this does not add clarity as to their buying intentions. GASC is tendering today for January shipment which will give some indication of sellers’ confidence.
On the weather watch, the US plains are starting to suffer with dry conditions. Winter wheat ratings dropped by 1% from 55% to 54% this week as a result. Plantings are now 95% complete, 1% ahead of this time last year. The Southern Hemisphere harvest is picking up. The La Nina weather pattern is bringing dry conditions to South America and wet weather to Australia. This is not helpful and has seen Australian wheat futures strengthen this week as the forecast turned increasingly wet.
Matif closed lower yesterday in light of weaker US markets and a stronger euro. The Russian Ag Ministry has revised its wheat crop forecast up 1.2% from its last estimate to 83 million mt. This would make their production circa 1 million mt higher than last year when they produced 73.3 million mt. Exports so far this season were said to be 14.8 million mt. The forecast shows a warm but wet outlook for Russia through the end of November and first week in December which will be favourable for export logistics.
London wheat futures were lower yesterday. May 18 closed at £144.75/t, down £0.70/t.
A slowdown in domestic demand is weighing on UK wheat values this week. Export data also shows a fall in UK shipments compared to last year. Export data for September came in at 75,248t, giving a cumulative total for the season of 147,161, versus 676,307 for the same period last year.
World oilseed markets are currently variable but the net result leaves our local values fairly unchanged.
Chicago rallied yesterday and overnight. Sterling’s strength this morning should negate the impact on us of the stronger Chicago market.