CASH MARKET WRAP: Wasde lights fuse, planting fears hit beans
Wheat
After a pause last week, US wheat futures were dragged higher by stronger corn prices and concerns over the impact of wet weather on the crop, with SRW up 6.3% at $5.3625/bu and HRW up 4.7% at $4.7025/bu by 1100 in London on Friday.
US cash prices tracked the futures market higher, with soft white wheat up $6/mt over the week to $237.75/mt FOB PNW and 11% HRW up $9.75/mt to $211.75/mt FOB US Gulf.
And although there was drama in the US, a lack of market-moving stories in the final weeks of the Black Sea crop’s development left buyers and sellers both unwilling to budge.
Price movement was limited, with Russian 12.5% unchanged at $194.50/mt FOB Novorossiysk and 11.5% at $185/mt.
Ukrainian feed wheat also lacked volatility and ended the week unchanged at $179/mt, while EU-origin feed wheat was down $1.75/mt to $180.75/mt FOB CVB, in line with movements on Euronext as it was priced at an €18/mt discount to the September contract.
The APW price dropped $10/mt over the week to $236.50/mt FOB W Australia as the Australian dollar weakened following the release of worse-than-expected employment figures that boosted the chance of an interest rate cut.
Corn
Prices started lower after a weather break took US plantings to 83% complete, before fresh rain set in and planting fears shifted to soybeans.
Wasde reignited the complex, as a 6% cut to the 2019/20 US corn yield took the USDA’s outlook to 166 bu/acre and crop to 347.5 million mt – down 34.2 million mt, with another cut to area anticipated next month.
Weather continued to trash US exports, with July US Gulf FOB offers at 98 cents over the July contract, rising above July offers for the PNW heard at 94 cents.
That took APM-15 FOB US Gulf assessments to $206.75/mt, a premium of 85 cents over July and up 9% over the week, with South America still controlling export markets.
APM-14 FOB Santos stood at $186.75/mt, up 7.6% over the course of the week while local analysts pushed estimates for Brazil and Argentina’s final corn crop to above 101 million mt and 50 million mt, respectively.
Argentina’s FOB Up River remained the most competitive, ending the week at $177.75/mt, 11 cents over July and its highest price since June 1, 2018.
Soybean
Futures rallied 4% over the course of the week as wet weather returned to the Midwest in a dynamic that is expected to increase soil moisture and drive down yields and acreage for next year's plantings.
That bullish feel overran a 2-million mt USDA write-down of US exports this marketing year to turn futures green and push July deliveries up that $9/bu mark – a threshold that hasn't been breached for almost two months.
As futures rallied, premiums in Brazil eased for July shipment and cash prices moved 1.5% higher to $369.25/mt FOB Santos by close of business Thursday.
That level is now $17.50/mt above FOB US Gulf values at $351.75/mt, although offers for cargoes out of the Gulf were few and far between as exporters struggle to source beans from barge deliveries on the Mississippi.
Data published by the USDA showed that grain and oilseed barges discharged in the New Orleans region were down by more than half in the first week of June compared to the same period a year earlier at 383 versus more than 800.
On a premium basis buyers will need to pay more than 75 c/bu over July futures for a July shipment out of the US Gulf and in Brazil fair value was seen at 118 c/bu over the same contract.
In China, the APM-6 was assessed at 194 c/bu over July futures, equating to a flat price of $397.50/mt.