CASH MARKET WRAP: Rising futures blunt cash trading

Wheat

Cash markets were largely uneventful over the course of the week, as the physical trade was kept in check by Christmas and New Year holidays that have much of the European and North American trade out of office.

Only a Thai feed miller was in the market over the course of the week, securing an optional-origin February-loading cargo at $240/mt CFR.

Offers in Russia held in the $220/mt FOB Novorossiysk for January loading, with sellers showing little willingness to discount in the face of a strong ruble, rising futures prices, and the expected return of big buyers to market in the new year.

European levels were a touch higher, with French 11.5% up 0.5% to $212.75/mt FOB Rouen for January and German 12.5% up 0.3% to $218.75/mt FOB Hamburg as the underlying Euronext contract rose, and demand from Algeria and Iran supported premiums in the local market.

Corn

Corn prices continued to rise through the week, as stronger wheat and renewed soybean optimism supported Chicago futures.

For the complex itself, there remained precious little in the way of drivers, however, although weather worries for Argentina’s newly planted crop and some fears around dryness in southern Brazil’s states could provide cause for concern as the crop develops.

For South America, Argentina’s new government saw its second increase to grain export duties approved by the Senate earlier in the week, driving old crop basis prices for Up River corn higher again as the duty rises to 15%.

That move saw the US Gulf consolidate its position as the cheapest origin for prompt corn, ending a truncated week at $177/mt, up $1.25/mt over the week, equating to a 61 cent premium to the March contract.

For Ukraine, which continued to see a dominant export performance that is likely to see 4.5 million mt of corn leave its ports in December, the FOB Ukraine APM-11 reached $177.50/mt – a 62 cent premium.

Soybeans

Soybean futures hit a seven-and-a-half week high on Thursday, with the January contract reaching $9.40/bu after China echoed US comments the two are close to a trade deal.

In the US Gulf, prices hit $368.50/mt on Tuesday for February shipment on a FOB basis, up by $1/mt from Thursday last week with Brazilian soybeans shipping out of Santos hit the same level, up $1.75/mt from last Thursday.

Barge basis in the Mississippi for February rose following reports of a large trading house shipping 22 barges to the Gulf on Monday, with levels assessed up 2 c/bu on the day on Tuesday to 57 c/bu over March futures – equating to $367.50/mt.

But buying interest from Chinese crushers largely fell in the week with no cargoes reported sold out of Brazil or the US since Monday.

The Agricensus APM-6 delivered China marker was assessed at $402.25/mt on Tuesday, up $1.25/bu from last Thursday.