CASH MARKET WRAP: Tenders dominate as prices catalyse buying

Wheat

Wheat prices fell globally over the week as a wave of tenders and private buying confirmed the downward trend.

Attention shifted back to the Black Sea for Egypt’s GASC tender on Tuesday as it bought 360,000 mt of Romanian and Russian wheat, paying $239.43/mt CFR, some $6.50/mt less than a fortnight before.

Algeria’s OAIC booked as much as 660,000 mt of – most likely – French wheat for $237.50-238/mt CFR, with prices around $7/mt less than last time.

The bearish trend in cash fed into an already-nervous futures market that is running out reasons to hold onto high prices as market attention continues to shift to the new crop.

That, in turn, brought back buyers in the private market who took their chance to pounce.

A deal at the start of the week for a handy of March loading Ukrainian 12.5% at $230/mt looked good value for the seller as midweek similar Russian cargoes were booked for February to Sudan at $222/mt and for March to Iran at $224.50/mt.

Feed wheat deals over the week included a Thai miller booking an optional origin cargo at $244.50/mt CFR for May and a South Korean buyer securing a Canadian cargo at $247.10/mt CFR for May-June.

Corn

Corn prices were largely stable over the course of another turbulent week, with steady demand balanced out by expectations of larger South American crops after Brazil and Argentina saw good rains.

South Korea was again at the vanguard of buying, with the country’s feed sector pushing out its corn purchases as far as May arrival dates, but the appetite for US corn appears to have slowed as Ukraine was competitive for prompt dates and Argentina came into play for the later buying.

Softer Ukraine prices triggered a burst of China buying over the week as well, with some sources saying up to six cargoes of corn had been bought.

Argentina and the US Gulf continued to tussle for price supremacy, with the FOB Up River and FOB Gulf hubs starting the week $2.50/mt apart, narrowing to 75 cents by the end, with Argentina ahead slightly at $174.75/mt, or 64 cents over the March contract.

However, Ukraine’s APM-11 FOB HIPP market did the most work to get into competition, shedding $3/mt to reach $179.50/mt, equating to a 76 cent premium to March.

Soybean

China slowed Brazil soybean purchases over the week, although farmer selling levels soared owing to a falling real and rising export premiums.

But demand for US soybeans remained limited while Mississippi barge congestion meant premiums ticked higher on supply bottlenecks, leading to fewer offers.

Futures closed on Thursday at $8.96/bu, up from $8.81/bu a week earlier amid increased levels of short-covering and the logistic problems.

Yet Brazil remained the focus of the cash market, with China buying cargoes for March to July 2020, and also for February to April 2021.

The Agricensus APM-6 China marker was assessed at $384/mt for March shipment, up from $378.50/mt a week earlier amid a modest rise in futures and higher export premiums.

And while the FOB Santos market was only marginally more active than the previous week, premiums in the paper Paranagua market rose to the highest levels since mid-December, buoyed by rising Chinese demand. 

Prices for shipment on a FOB Santos basis were assessed at $353.75/mt on Thursday, up from $347.25/mt a week earlier.