CASH MARKET WRAP: Prices slump as trade talks end with no progress
Wheat
Importers continued to tender for volume this week with Jordan's MIT and JSSGC picking up a cargo each, while the Philippines bought three and Algeria booked 570,000 mt of French milling wheat, with prices paid stable or lower as futures fell to their lowest level since mid-May.
Ukraine's feed wheat market remained tight despite the harvest progressing, as sellers held on to volumes and waited for higher bid levels, with the tightness spilling over into the 11.5% market, which firmed to $189-190/mt FOB panamax ports.
The Russian wheat market saw a quiet week on slow farmer selling, with buyers sticking to their guns to bid $192/mt for 12.5% milling wheat for August loading, with offers static around the $195-196/mt levels.
However, Bangladesh’s state buyer approved a 100,000 mt deal for Russian origin milling wheat at $267.30/mt CIF on Wednesday.
Argentine wheat plantings are nearly finished, with December loading firming $2/mt on the week at $192/mt FOB Up River, while spot APW Australian wheat remains out of the market at $232/mt.
Corn
Corn futures lost almost 6% of their value over the course of the week, largely tracking soybeans lower through the turbulence of US-China trade negotiations.
The falls were enough for destination markets to take interest, with the CFR South Korea assessment slipping by almost 4% over the week to end the period at $205.50/mt, or 125 cents over the September contract.
That move tempted end users back into the market, with the country’s big feed players soaking up over 300,000 mt in the space of the week, rounding out outstanding 2019 corn requirements and picking up their first 2020 cargoes.
Some of the heavier falls on the underlying Chicago corn contract were dissipated by firmer basis values in key origins, with Argentina’s Up River FOB hub moving up from a slim one cent premium, to 8 cents over September as basis adjusted to the lower futures.
Although much of the direction stemmed from the US, it is South America that is poised to benefit, with the APM-14 assessment for Brazil’s FOB Santos market easing by 4.3% to reach $167.25/mt and secure much of the South Korean sales.
Soybeans
New US-China trade talks that starting on Tuesday in Shanghai dominated headlines in the soybean market at the beginning of the week.
But the abrupt ending of these talks on Wednesday, without any real developments, was then followed by an additional 10% tariff on Chinese imports announced by the White House on Thursday.
September futures plummeted to a 10-week low of $8.47/bu, with US Gulf cash premiums also easing for loading in the same month with flat prices down $16.25/mt on the week to $334.25/mt.
Brazilian and Argentinian premiums rose in response to the collapse in Board values and the expectations of increased Chinese buying interest.
By close Thursday, offers for Paranagua loading were at 120 c/bu against bids at 110 c/bu, up 29 c/bu and 27 c/bu from Monday respectively.
Argentina FOB Up River basis also shot up, with highest offers reported at 70 c/bu over September futures by close Thursday, up sharply from the last deal on the same day heard at 53 c/bu on the same basis.
The APM-6 delivered China price was assessed at $385/mt on Friday, down $9/mt from last Friday.