Gleadell Daily Grain Comment - Wednesday 15th February 2017

[ADM Agriculture]

• US markets – soy lower on talk of higher crop/export forecast and improving weather which may speed up harvest progress – Corn lower on higher Brazilian crop forecast plus uncertainty over a US border tax and impact on exports to Mexico – Wheat down on liquidation due to an overbought technical picture, higher US$ and reports of rains in the forecast which will aid winter wheat in Texas and Oklahoma.
  
  
• US markets fall as Mexico plays ‘hardball’ on trade threat – Mexican politicians threaten to look to South America for imports.
  
  
• SovEcon reduced their estimate of the Russian wheat crop to 69mln t, from 70mln t previously - winterkill on as much of 4% of winter plantings was cited for the reduction.
  
  
• Australian grain exports likely surged to an all-time monthly high of more than 4mln t last month on strong demand from Saudi Arabia, China and India and lower prices amid bumper crops.
  
  
• China sold 215,414t of wheat at state reserve auction yesterday – sales represent 8% of the 2.62mln t available.
  
  
• Safras & Mercado reports Brazil soybean harvest a/o Feb.10 was 10% complete, vs 15% y/y and 5-yr average of 10% (Mato Grosso 45% complete vs 27% vs 19%, rainy Parana 10% vs 31% vs 17%).
  
  
• EU MATIF prices closed lower, but still holding near last week’s 5-week high on solid exports, but weaker US market and talk of new crop Russia prices to fall 7% weighs heavily.
  
  
• UK inflation has reached its highest rate for two and a half years, mainly as a result of the rising cost of fuel on the back of weakened £ – CPI reached 1.8%, up from 1.6% in December.
  
  
• UK wheat exports slumped to a seasonal monthly low of 93,425t in December as origin loses competitiveness, meanwhile, imports surged to seasonal monthly high of 173,456t.
  
  
  Last Trade Settle:
  
  London May ’17 Settle £148.25/t – down £0.05/t from previous close
  
  Paris May ’17 Settle €174.50 – down €0.50/t from previous close
  
  CBOT Mar ’17 Corn Settle $3.7425/bushel – down 1.25c/bushel from previous close
  
  CBOT Mar ’17 Wheat Settle $4.4950/bushel – down 2.75c/bushel from previous close

Currency Today:

GBP EUR 1.1785
GBP USD 1.2430
EUR GBP 0.8480
EUR USD 1.0545