- Location
- UK
- It has been another brutal day with equity markets tumbling on COVID-19 fears: the FTSE 100 plunged more than 10% [its worst day since the 1987 crash] whilst the French CAC 40 index abandoned more than 12% in its worst one-day drop ever. In the US, the Dow Jones was down nearly 1,800pts (at the time of writing) or 7.6%, failing to strongly recover despite the US FED injecting a colossal $1.5tn of liquidity.
- The coronavirus continues to spread rather rapidly outside China and as such, US President Trump banned travel from Europe to the US for the next 30 days. In the UK, between 5,000 and 10,000 people could be infected according to the government's Chief Scientific Advisor.
- EU grains were yet ending the day little changed, not that the 1.4% fall in CBOT wheat prices was to be ignored but both the euro and the Sterling fell sharply against the US dollar, respectively -0.9% and -1.6% on disappointing news from the ECB and Downing Street. Consequently, Nov-20 LIFFE feed wheat continues to hover over the key £160/T level whilst after scoring a fresh contract low of 176.75€/T, Dec-20 Euronext wheat jumped back toward the 180€/T mark.
- Stratégie Grains raised (once again) its 2019/20 EU soft wheat exports by 0.6MMT to 31.2MMT on better-than-expected German sales. If realised, it would be the best exports in 5 years.
- A rather different story in the US, where both wheat and corn were posting steep losses although recovering from the session lows. May-20 CBOT wheat briefly traded below the psychological c$500/bu mark for the first time in 5 months. Despite strong weekly US corn export sales of 1.5MMT (vs 0.6-1.2MMT expected), fears over the lack of demand for ethanol weighed on the cereal with the May-20 contract falling to c$365/bu, a fresh contract low.
- The Rosario Grain Exchange kept its 2019/20 Argentina corn crop production forecast unchanged at 50MMT with the harvest estimated to be 7% complete, according to the Buenos Aires Grain Exchange, compared with 6% last year and 4% on a 5-yr average.
- The Russian government reiterated that there is no reason for limiting the country's grain exports which are forecasted at 45MMT this season.
- Algeria bought about a hefty 600KT of milling wheat at $226-227/T (C&F) after last month's 660KT purchase at ~$238/T.
Rapeseed collapses 3% but it ends well off the lows
- With crude oil down 6% and Brent abandoning 9%, it could only be a 'complicated' day for EU rapeseed which dropped to a 1-year low and settled 3% lower on yesterday's close in a dramatic 12.5€/T-range session.
- CBOT soybeans were also badly hit with contract lows scored across the board. Weekly US soybean export sales were once again rather disappointing at 303KT vs 400-800KT expected with China cancelling 90.3KT.
- Due to the lack of rain in the core producing regions of Argentina, the Rosario Grain Exchange lowered its country's 2019/20 soybean production forecast by 3.5MMT to 51.5MMT. Interestingly, the USDA raised its estimate by 1MMT to 54MMT in its most recent WASDE report [more info click here].
- The Buenos Aires Grain Exchange echoed the previous comment with only 39% of the Argentine soybean crop rated 'Good/Excellent' vs 50% last week and 51% last year. As a result, soymeal prices remained firm.
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