CASH MARKET WRAP: Stocks update fires huge gains across the Board

Wheat

The physical wheat trade was thrown off balance midweek by a massive futures rally after the USDA unexpectedly cut its winter wheat production figures and reduced carryover stocks from the previous marketing year.

Having trended lower in the first half of the week, Wednesday’s rally was enough to prevent much in the way of trading activity, as US wheat bore the brunt of the rally as 11% HRW jumped $11.50/mt to $255.25/mt FOB US Gulf.

Russian 12.5% was up $2.50/mt to $235.50/mt FOB Novorossiysk and Ukrainian 11.5% $3.50/mt to $236/mt FOB PIPP.

In the EU, French 11.5% was up $6/mt to $235/mt FOB Rouen and Polish 12.5% $7.25/mt to $231.50/mt FOB Gdansk.

Argentinian 12% was up $6/mt to $226/mt FOB Up River and APW was up $9/mt to $257.50/mt FOB Kwinana.

Only Jordan’s MIT booked 120,000 mt of milling wheat via tender, and Thailand’s FMA 72,000 mt of feed wheat.

Corn

Futures stole the show during the week following the release of the USDA’s quarterly stocks report, which showed stock levels held in the US unexpectedly coming in at 1.995 billion bu, down 10% from where analysts had expected the figure to fall.  

By close Thursday, December futures had reached $3.826/bu, the highest level since the end of February. 

In the US, offers for November shipment remained lacking, with the nearest available offer seen for January at 130 c/bu over March futures, up 5 c/bu on the week. 

November shipment on a FOB basis from the Gulf was assessed at $198/mt Thursday, up $5.25/mt since last Friday. 

Nevertheless, despite the rise in US values, the origin became the most competitive, with the Ukraine and Argentina falling into second and third place respectively, assessed at $198.50/mt and $200.25/mt Thursday for November, up from $195/mt and $190.25/mt respectively, amid a spike in Argentina basis offers by 5 c/bu and bids by a steeper 10 c/bu. 

Elsewhere, tender activity remained thin but reports did emerge Friday morning that Iran had likely picked up a large volume from either the Black Sea or Brazil overnight, with Syria also issuing a tender for 50,000 mt earlier in the week. 

Soybean

Cash prices in the soybean market tracked futures higher over the course of the week as what was supposed to be a benign stocks report from the USDA set prices on fire.

Slashing more than 1 million mt from the US's beginning stocks for the 2020/21 marketing year, the report on Thursday sent futures on the biggest rally for more than two years.

That 4% surge underpinned a 2-3% rise across cash markets.

In other news Argentina announced a cut in export taxes for beans and derivatives for the final quarter of 2020 in an attempt to get farmers selling so the treasury could hoover up some dollars.

Chinese CFR prices rose 2% in an abbreviated week to close Wednesday at $475/mt CFR North China, Brazilian beans FOB Santos rose from $440 to $452/mt and US Gulf shipments were pegged at $425, up $8/mt on the week.