CASH MARKET WRAP: Corn's planting woes spill over into wheat, beans

Wheat

In a volatile week for the futures market, prices rallied in support of wider concerns over the viability of crops in the US after a series of floods and storms.

SRW was up 4.2% for the week by 0900 in London on Friday while HRW was pushing a 7.8% gain for the week.

And cash markets were spared none of the drama, following one step behind the futures moves as sellers raised their offers and buyers followed.

Russian new crop 12.5% wheat spiked from $189/mt at the start of the week to the $197.50/mt by Wednesday, before being offered back down to $193/mt by Thursday evening.

Ukrainian feed wheat moved similarly, up as high as $185/mt before falling back to $182/mt by Friday morning.

Meanwhile, with Australian and Argentinian crop supply tightening, prices spiked – with Argentina 12% up from $219/mt to $225/mt and Australian APW up $241.75/mt to $251.50/mt.

Corn

Corn markets continued to be boosted by fears over US planting conditions, as incessant rain delayed planting and analyst predictions for lost acreage surged towards 10 million acres.

With Chicago’s record net short posted only a few weeks ago, the change in fortunes has radically redrawn production outlooks and seen that short dissolve, with some now expecting corn to be net long when CFTC data is posted.

Outright prices have surged higher on the back of stronger futures, while “unprecedented” flooding pushed US Gulf FOB basis values higher, taking APM-15 FOB US Gulf from $179.25/mt to $198/mt by Thursday – up 10.4%.

For Argentina, however, prices again succumbed to the weight of harvest supply, sending basis differentials into negative territory and driving a near $30 wedge between Argentina and US Gulf, as FOB Up River prices rose only 5% to $170/mt.

Soybeans

Soybean cash prices rose over the week, buoyed by a volatile board that on Wednesday hit the highest level since 23 April for July, as delayed planting concerns persisted.

Despite corn taking the spotlight over lost acres resulting from wet weather in the Midwest, beans might also take a hit with some estimates hinting at 3 million lost acres out of an expected 84.6 million mt.

In Brazil, a stronger real over the week alongside a higher board eased premiums as the week unfolded.

But severe flooding further up the Mississippi disrupted logistics in the US causing Gulf FOB offers to spike from Wednesday, hitting 75 c/bu for July loading.

At $364.50/mt in Santos versus $343.25/mt in the US Gulf for July shipment, the spread narrowed by $8.50/mt compared to week earlier as a shortage of supply at ports pushed US beans higher despite sluggish demand.

The Agricensus APM-6 CFR China marker rose in line with origin prices, hitting $397.25/mt on Friday for July, up more than 5% on last Friday.