Bulls break out of the market - Daily Markets

[CRM AgriCommodities]

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Bulls break out of the grain market The bearish week for commodities continues as new crop confidence grows. Grains Weekly US net sales of 343.6KT for 2020/2021 were down 12% from the previous week, but up 24 percent from the prior 4-week average. With only modest US wheat export data, the still-growing confidence in new crop production has added further pressure to global markets. The IGC global supply and demand estimates have also provided confidence in new crop production in the northern hemisphere. The IGC is estimating Russian wheat production at 76.9MT, which while down year on year, is still larger than in 2019/20. In the EU, production estimates for 2021/22 remain modest at 136.8MT, but still up from 124.4MT in 2020/21. Corn production estimates are also providing confidence, with Brazilian estimates for 2021/22(March-Feb) corn production at 105.8MT, while US production for the 2021/22 season is seen at 384MT, up from the storm-damaged 2020/21 crop of 360.2MT. Read the full IGC summary here. Weekly US corn net export sales of 4.48MT for 2020/2021 were up noticeably from the previous week and from the prior 4-week average, with the majority of the export sales to China (3.89MT). The USDA full season export estimate is being fast approached. Oilseeds While corn exports have made headlines, there have continued to be minimal US export sales. Exporters haven’t reported sales to overseas buyers of 100Kt or more since the 29th of January. Weekly US net sales of just 101.8KT for 2020/2021 were down 50% from the previous week, but end-season stocks still remain tight. The ICG is forecasting 2021/22 US soybean production at 122.8MT, but with ending stocks to only recovery by 0.5MT to a still-low 3.6MT by the end of the 2021/22 season. Read the full IGC summary here.

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​ With Europe to return to a large global exporter, next season and European wheat will likely need to compete strongly with the Black Sea next season, rather than price above, in order to limit exports.

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