Markets are sick and there is no cure in sight (yet)

[CRM AgriCommodities]

• Grains continued lower in the wake of tumbling financial markets and a steep correction in oil prices as the COVID-19 continues to spread rapidly outside China.
• Despite the weaker pound and ongoing poor planting conditions in the UK, the 'old crop' May-20 LIFFE feed wheat contract settled at its lowest level since mid-December 2019 whilst the new crop Nov-20 expiry continues to hover over the £160/T mark.
• Euronext wheat was also under pressure today, falling to a fresh 3-month low and closing below its key 100-day moving average for the first time since the end of November 2019. The coronavirus spreads rapidly in Italy with 400 confirmed cases after a 25% surge in 24 hours. The strengthening euro was also weighing on European prices.
• The International Grains Council raised its 2020/21 world wheat production forecast by 4MMT on last month to a record 769MMT vs 763MMT this year [more info click here].
• The lack of bullish catalysts coupled with news of an 'unknown origin' coronavirus case in the US weighed heavily on both CBOT wheat (down 1.5% to a 2-1/2 month low, breaking through the c$530 level on the May-20 contract) and corn (down 1.8% and closing in the red for a 7th consecutive session to a fresh contract low on the May-20 expiry). In Europe, the Jun-20 Matif maize contract also settled at a fresh contract low, below the 170€ mark.
• After 3 long years of dry weather, Australian farmers could finally benefit from a forecasted prolonged period of cool and wet weather with a 70% chance to see above normal precipitation over the next 3 months (source: BOM).
• In Argentina, the Buenos Aires Grain Exchange increased its country's 2019/20 corn production forecast by 1MMT to 50MMT ie in line with the USDA's estimate and compared with 51MMT last year. According to today's Bolsa crop condition report, 59% of the Argentine corn crop was in 'Good/Excellent' condition as of Feb 26th vs 61% last week and 56% last year. The weather forecast is still drier than desired for maturing crops.
• Ethiopia is in the market for 200KT of milling wheat.

To find out how this impacts your business and for insights, opinions, strategies and more get in touch. Or call 01223 608910.

EU rapeseed tumbles in the wake of steep losses in crude oil prices Euronext rapeseed tumbled more than 5€/T on the May-20 contract, settling at a 3-week low in the wake of Brent oil which fell for a 5th consecutive session to reach its lowest level since the end of December 2018. The key $51/bbl technical support is holding for now. In a rather volatile session, May-20 CBOT soybeans fell to a fresh 9-month low before recovering and turning positive in the afternoon with its 10-day moving average still acting as a strong technical resistance. The IGC revised its 2019/20 world soybean production forecast up 3MMT month on month to 345MMT over improving conditions in South America. If realised, it would still be a 5% decline year on year due to a poor harvest in the US, down by ~24MMT on last year. Global soybean stocks are pegged at 39MMT ie down nearly 30% according to the same source. CBOT soymeal jumped higher for a second consecutive session with the Argentine government expected to increase tariff on soybean, soymeal and soybean oil exports in the coming days. The Buenos Aires Grain Exchange raised its 2019/20 Argentina soybean crop forecast by 1.4MMT to 54.5MMT (vs 53MMT for the USDA and 55.3MMT LY) amid beneficial rain in February. As of Feb 26th, 69% of the Argentine soybean crop was rated 'Good/Excellent' against 71% last week and 47% last year. Malaysia palm oil futures snapped a 3-day losing streak of 6.2% over bargain buying. To find out how this impacts your business and for insights, opinions, strategies and more get in touch. Or call 01223 608910. Charts relevant to your grain prices: Spread between Nov LIFFE Feed Wheat and Dec EURONEXT Wheat (in £/T) Futures & Options prices: Book onto our next grain marketing course 7th Apr, Edinburgh - (click here) 21st Apr, Lincoln - (click here) 22nd Apr, Cambridge - (click here) Or register interest for your local 2020 course: click here Hiring: We have a number of exciting opportunities