Gleadell Daily Grain Comment - 5 December 2017

[ADM Agriculture]

• US markets – soy higher but off the highs, as drier South American weather offers support. Corn lower on increased fund selling, disappointing export inspections. Wheat lower as market rally on talk of increased inflation (tax reform / lower US$) failed.
• Australian ABARES reduced their estimate of the country’s wheat crop to 20.27mln t in their December report, down from 21.63mln t in September. This compares with the current USDA estimate of 21.5mln t.
• Heavy rains fell in eastern Australia over the weekend, with amounts as high as 7 inches in eastern Victoria reported. The extreme moisture is raising concerns about the quality of unharvested wheat.
• Argentine soy conditions have deteriorated due to lack of moisture and weekend rains were lighter than expected. Dryness persists in Entre Rios, Santa Fe, Cordoba and parts of Buenos Aires where crop development is struggling.
• BAGE reported soybean plantings were estimated at 92% complete compared with 84% last year and the five year average of 87%. Corn plantings reported as 38% complete vs 36% last week, with area unchanged at 5.4mln ha.
• Safras & Mercado seen Brazil’s winter corn production down 11% at 60.7mln t, compared with their previous estimate of 63.7mln t, with the winter area down 6% from last year, at 10.8mln ha. Total corn production seen at 90.5mln t, down 17% y/y.
• Russian wheat export prices were slightly higher last week according to IKAR, due to ongoing demand from shippers.
• Ukrainian wheat export prices were mostly unchanged on the week according to UkrAgroConsult.
• Saudi Arabia purchased 495kmt of wheat over the weekend for Feb-Apr arrival, despite looking cheap against German/Baltic replacement, looks the most likely origin.

Last Trade Settlement:
London May ’18 Settle £143.00/t – up £0.50/t from previous close
Paris Dec ’17 Settle €161.75 – up €2.25/t from previous close
CBOT Dec ’17 Corn Settle $3.3950/bushel – down 5.25 cents/bushel from previous close
CBOT Dec ’17 Wheat Settle $4.1025/bushel – down 4.25 cents/bushel from previous close

Currency Today:
GBP EUR 1.1310
GBP USD 1.3415
EUR GBP 0.8840
EUR USD 1.1865