CASH MARKET WRAP: Buying activity rebounds amid tenders, China demand
Wheat
Wheat buyers in the spot market continued their long-running trend of waiting for discounts to emerge, returning to the market this week to complete nearby deals for Russian 12.5% at the $210-211/mt FOB mark.
And attention continued to pick up for the new crop, with tenders in South Korea, Thailand and private business in the Black Sea all looking to be sourced from the 2020/21 crop.
Over the course of the week, Agricensus’ spot APMs generally headed lower as Russian 12.5% lost $2.50/mt to $211.50/mt FOB Novorossiysk and Ukrainian 11.5% lost 50 cents to $209/mt FOB HIPP.
In the Southern Hemisphere, Argentina’s 12% slumped $6/mt to $224/mt FOB Up River and APW lost $1/mt to $257/mt FOB Western Australia.
And feed wheat assessments also fell, with Ukrainian cargoes down $2.50/mt to $205/mt FOB HIPP and EU down $1/mt to $207.75/mt FOB CVB.
EU cargoes were boosted as the euro strengthened against the dollar – with French 11% up $3.50/mt to $213.50/mt FOB Rouen, German 12.5% up similarly to $218.25/mt FOB Hamburg, and the Black Sea 12% up $1/mt to $212.50/mt FOB CVB.
Corn
Ongoing tender activity kept the market ticking over in a week in which futures clawed back some of the ground lost to Covid-19 fears.
The May contract fought back from a contract low of $3.68/bu to peak at $3.85/bu as South Korea and Taiwan picked up corn via tenders or private deals, while futures also drew support on a burst of sorghum buying from China that injected a touch of phase one optimism.
Arguably the biggest strides were made by Argentina, where the government clarified its intentions around export duty changes and reopened the export license registry, providing a fillip to the Up River cash market and bringing back trading activity.
Pressure brought to bear on basis values meant that rising corn futures were offset to some extent, with the Up River assessment closing Thursday at $168.50/mt – up $3.25/mt over the course of the week and equating to a 48 cent premium over the May contract.
However, other origins gained value at a faster pace, with the US Gulf ending the week $8.25/mt above Argentina, having started at a $5.50/mt premium, while Ukraine struggled to match the competitiveness as a healthy export programme kept the domestic CPT market taut.
Soybean
Activity in the cash markets rebounded following last week’s lull as Chinese crush margins improved, prompting crushers to snap up more cargoes.
But once again the US was out of the picture as the destination of choice for buyers, with cost competitive South American beans squarely in the picture.
By Thursday, Chinese crushers had picked up at least 40 cargoes. This compares with last week when less than 10 cargoes were booked.
The Agricensus APM-6 China marker for April shipment was assessed at $380.25/mt, up $4/mt from last Friday.
And at origin, further falls for the Brazilian real led to a sharp uptick in origination activity, with trade estimates pointing to at least 4 million mt of 2020 and 2021 crop being sold by farmers as of Thursday.
That compares with 2-2.5 million mt during the whole of last week.
The Agricensus APM-8 paper Paranagua assessment for April hit $344.25/mt on Thursday, up $1.75/mt from last Friday.
In the US though, exporters continued to struggle amid a dearth of demand with no cargoes reported sold.
The Agricensus APM-10 US Gulf marker for April was assessed at $351.25/mt on Thursday, up $1/mt from last Friday.
May futures closed at $8.97/bu on Thursday, up 5 c/bu from last Friday’s close.