CASH MARKET WRAP: Beans smash record as China buys, crop dries

Wheat

Wheat prices were mixed over the week but typically trended higher in line with a sustained rally in the Black Sea cash market and a bounce in US wheat futures in the second half of the week on the back of firm global demand.

Big tender-based buying saw almost 1 million mt booked, with Egypt’s GASC, Turkey’s TMO, Jordan’s MIT, Japan’s MAFF, and South Korea’s SPC all securing cargoes for shipment out to the end of the year.

At origin, Russian 12.5% was up 1% to $228/mt FOB Novorossiysk, with Ukrainian 11.5% edging higher to $225/mt FOB HIPP while feed wheat was steady at $223/mt.

In the EU, French prices lost ground and are priced at a discount to Russian wheat for the first time since the start of the marketing year, with 11.5% assessed at $225.25/mt FOB Rouen.

Polish prices were down almost 2% over the week to $218.50/mt FOB Gdansk, helping the origin to price into a GASC tender for the first time since 2015.

US prices were up 3% with HRW 11% at $242.25/mt FOB Gulf and SW 10% at $231/mt FOB PNW, Canadian WRS 13.5% was up 5% to $246.75/mt FOB Vancouver.

Argentinian 12% is priced at $214/mt FOB Up River for December loading, with APW at $242/mt FOB Kwinana.

Corn

Rising futures during the week, largely because of strident movements on soybeans, coupled with stronger premiums in all key origins as a result of strained origination activities lifted flat prices.

Chinese buying returned, with USDA export sales notices attributing 490,000 mt to the country during with more likely contained within unknown destination sales of 380,000 mt.

Yet an announcement Thursday the country would keep its 2021 quota fixed at 7.2 million mt raised questions about whether the more than 9 million mt already on the books would be shipped.

Nevertheless, a steady flow of soybeans toward the PNW and Gulf for fourth quarter shipment lifted Gulf and PNW FOB premium offers 10 c/bu higher to 160 c/bu and 120 c/bu over the December contract as elevations costs increased.

And in Argentina, flat prices for October shipment on an Up River basis hit $189.25/mt, up $9/mt on the week as premiums rose across the curve amid high replacement costs. But the Up River hub remained the most competitive.

In the Black Sea, similar problems with origination lifted FOB prices for panamax vessels by $7/mt since Friday for the October laycan, hitting  $195/mt by Thursday’s assessment.

Tender activity earlier in the week centred on a 65,000 mt shipment for MFIG set to arrive in January, with no offers emanating from the US versus at least six from Brazil.

And South Korea’s Kocopia passed on its first tender to buy in a month for a December cargo of 55,000 mt, as offers failed to meet expectations of $225/mt CFR South Korea.

Soybean

Cash prices continued their remarkable bull run for the sixth successive week with futures smashing 27- and then 28-month highs as China continued to buy and the weather looked ominous for crops both north and south of the equator.

With futures climbing from $9.96/bu to $10.28/bu, there was no talk of premiums at ports offsetting that rise with cash buyers having to absorb the full move in futures and then some more on premiums in Brazil.

China’s demand for US beans means 56% of the current forecasted US export volume has already been committed and with at least another 2 million expected to have been bought since those figures were updated on September 10, up to 60% could have already been sold.

With exports expected to be cut alongside the crop that figure could get close to two-thirds of the crop by end September – a record by some margin.

And with soil moisture in Mato Grosso well below normal and threatening Brazil's forecasted 133-million mt crop, prices rose.

FOB prices in the US Gulf for Nov shipment rose 3.7% from $433/mt to $449/mt, Brazil old crop rose 4.1% from $409 to $426/mt FOB Santos, Brazil new crop (Feb) rose from $396 to $413/mt FOB Santos and CFR China rose 3.2% from $460 to $475 basis North China.