CASH MARKET WRAP: Grains undergo mixed fortunes in turbulent week

Wheat

The oncoming harvest in Russia pressured FOB prices in the Black Sea this week with both grades of protein falling steadily since last Thursday.

The 12.5% lost a chunky $8/mt while the 11.5% lost $4/mt over the period, with the lower quality not moving as much because there are concerns there might not be as much lower grade around.

A sharp fall in futures ahead of the break also saw US cash prices slump, but they still remain uncompetitive with FOB US Gulf HRW at $210.75/mt by close of business Wednesday.

In Europe, France, Germany, Baltics, Romania are starting to look competitive as harvest begins, but recent Algeria and Tunisia tenders are pushing Matif higher. Australia and Argentina remain out of market.

Corn

Corn futures were dominated by the rollercoaster response to fresh USDA planting data, which shunned expectations of a fall in acreage to post a near-92 million acre outlook.

While many expressed doubts, prices plunged by 6.3% before rallying to regain 5% and end the period 6 cents lower at $4.33/bu.

The recovery coincided with fresh supply fears, as domestic US corn basis reached parity with FOB US Gulf basis in some ethanol locations, while rain in Argentina and increased truck freight costs in Brazil saw South America’s prices rise.

With corn still fighting feed wheat and soybean meal for end users’ attentions, demand remained reserved, however, with South Korea's feed makers tendering for corn but buying meal instead.

Argentina remains the most competitive origin, with FOB Up River assessed Thursday at $180/mt, a premium of 24 cents over September, versus Brazil’s APM-14 FOB Santos at $185.50/mt (40 cents over September).

Brazil had started the week $8/mt above Argentina.

Soybeans

Futures lost ground at the start of the week on improving weather, lower Chinese demand and bearish corn which hammered the market.

A rebound occurred Wednesday, as a reversal of corn values lifted the market before trading ceased early.

By Wednesday, the August contract closed at $8.89/bu, down 5 c/bu from Friday’s close.

In the cash markets, offers out of the US Gulf held at 60 c/bu for August loading  and on a flat price basis fell $4 week-on-week to $348.25/mt by Wednesday.

Further south in Brazil, FOB Santos cargo values fell $8.25/mt for loading in August, hitting 363.50/mt.

Brazilian exporters were reluctant to lower offers despite low demand because of a seasonal uptick in replacement costs driven by higher inland freight costs.

With fewer beans contracted and an ending of the country’s harvest, Chinese crushers that did require stock sought out more Argentinian cargoes.

The APM-6 China price was assessed 186 c/bu over August futures on Friday, equating to $392.75/mt.