-Wet weather/solid export sales support early trade
-Egypt tenders for wheat – Russian remains lowest priced
-Iraq’s reduced wheat area likely to prompt larger imports
It’s another very quiet news morning in the grain markets, leaving little in the way of new guidance for this morning’s trade action. Grains traded
mixed overnight, but come into the break with slight gains across the board. Heavy western belt rains remain in the forecast.
After the close yesterday, Egypt tendered for an unspecified amount of wheat for Dec 1-10 shipment. The lowest 8 offers were all Russian,
ranging from $233.95-239.90/tonne fob. Romanian wheat was offered at $240.39/tonne, French at $247.75 and Ukrainian at $248/tonne fob.
Taiwan bought 65k tonnes of optional-origin U.S./Brazilian corn at +148.77 cents CH9 c&f, equating to roughly $206.77/tonne based on
yesterday’s close, with shipment of Nov 20-Dec 9.
Iraq announced they will reduce irrigated winter wheat planted area this year by 55% due to the country’s water shortage. It is thought the
reduction in irrigated area could reduce total wheat production by around 20% this year, likely resulting in a similar increase in imports. Iraq
produces around 4.0 MMT of wheat annually, while importing 3.5-4.1 MMT in recent years, so this situation could result in roughly a 1 MMT
decrease in production/increase in imports accordingly.
U.S. corn sales, for the week ended 9/27/18, were solid at 1.431 MMT (56.3 million bushels), falling within market expectations of 1.0-1.6 MMT
and reflected the third consecutive week of sales of 55 million bushels (1.4 MMT) or more. With last year’s same-week sales being rather poor
at just 29.4 million bushels, total commitments of 776 million bushels are now up 63% from last year’s 476 million.
Soybean sales last week were solid at 1.521 MMT (55.9 million bushels), at the extreme top end of market expectations of 900k-1.5 MMT, and
were easily the best of the first four weeks of the 2018/19 marketing year. Strong sales were expected given the previous USDA daily sales
announcement of 672k tonnes of soybeans to Mexico. 100k tonnes in sales to Argentina were seen again, as were Chinese cancellations of
124k tonnes. Total commitments of 742 million bushels are still down 13% from last year’s 855 million at this time.
U.S. wheat sales last week of 435k tonnes (16.0 million bushels) were within market expectations of 250-550k tonnes, but slipped from the
previous week’s 24.1 million bushels and were below last year’s same-week sales of 18.1 million. Total commitments of 415 million bushels
remain down 19% from last year’s 515 million bushels at this time, while the USDA is currently projecting a nearly 14% increase in wheat
exports from last year.
New crop SBM sales were solid at 412k tonnes, towards the upper end of market expectations of 200-500k tonnes, while soybean oil sales
were modest, as expected, at 9.7k tonnes.