CASH MARKET WRAP: Futures ease as corn, wheat, soybean await direction

Wheat

With global wheat futures again trading in a tight range this week, a lack of wider direction for the trade left cash markets looking to regional supply and demand factors to drive price movement.

The EU found some support from the recent pace of sales in the bloc, while the Black Sea was generally lower as sellers lowered offers hoping to catch new business.

December loading Russian 12.5% was down $1/mt over the week to $207/mt FOB Novorossiysk, with a flurry of midweek activity seeing cargoes booked at the $206-207/mt FOB mark.

Ukrainian 11.5% was up $2.50/mt to $205.50/mt FOB HIPP as at least one cargo traded midweek, while German 12.5% was up similarly as a December 12.5% cargo was booked around $205/mt FOB.

In the southern hemisphere, Argentinian 12% gained $2/mt to $193/mt FOB Up River and Australian APW was up $1/mt to $238/mt FOB Kwinana.

Buyers again took advantage of only modest price movements, with tenders in Tunisia, Algeria, Japan, and Jordan closed, while Syria launched a new 150,000 mt tender and Ethiopia is still looking to buy 680,000 mt.

Corn

A second burst of South Korea corn buying took the country’s purchases past the 800,000 mt level during the week, but basis prices at origin continued to draw support on a cocktail of factors, largely redressing the effect of lower corn futures.

For Brazil, where December FOB Santos offers jumped to 90 cents, domestic strength in the livestock sector spilled over into corn prices in a move that will likely slow the export pace, while Argentina’s FOB Up River hub approaches the end of its season, with the focus moving to the 2020 new crop.

With Ukraine’s basis also picking up on demand from Egypt, South Korea, China and Iran, US exports received a shot in the arm with bigger volumes reported at export inspection data and net sales along with a brace of private exporter sales notices.

All that came as corn futures continued to head lower, with the December contract losing around 1% of its value to reach $3.68/bu by Thursday, while FOB Ukraine corn values reached $170.25/mt, up nearly 10% over the week.

Soybeans

Prices for soybean shipments from all key origin ports in the Americas fell in response to weaker futures, which slumped to a seven-and-a-half week low amid continued obstacles tp progress in US-China trade talks.

In Brazil prices for shipment out of Santos hit $366.25/mt Thursday, the lowest level since September 30.

The CFR China price for shipment from Brazil followed a similar trajectory, hitting $403/mt by Thursday, the lowest level since September 27.

As flat prices fell, basis found some support and strengthened 4-5 c/bu in Brazil to offset some of the loss on the futures market.

By Friday morning, at least 30 trades had been confirmed by Agricensus with most of these booked by China on a CFR basis for shipment from February-May 2020.

Elsewhere, crush margins in the US, Brazil, and Argentina continued to rise amid rising soyoil prices.

US net sales and export inspections remained strong, although with fewer cargoes purchased by China this week there is the chance this could weigh on next week's figures.