- Today’s figures from Brussels showed wheat export licences totalling another 489,000 mt for the week, bringing the total for the year up to 12.527 million mt, which compares with 9.958 million mt a year ago.
- We have commented accordingly in previous weeks, and feel disinclined to repeat the same old……! Suffice to say the high rate of EU exports appear to be at the expense of US tonnage and current price differentials have led Strategie Grains to increase their forecast for EU exports and decrease US tonnages accordingly.
- US weekly export data reported the following:
Wheat: 387,900 mt, which was within estimates of 350 to 550,000 mt
Corn: 253,400 mt, which was within estimates of 150 to 300,000 mt
Soybeans: 1,253,000 mt, which was above estimates of 650 to 850,000 mt
Soybean meal: 141,700 mt, which was below estimates of 150 to 200,000 mt
Soybean oil: 20,100 mt, which was within estimates of 15 to 25,000 mt
- The Russian debate continues with Reuters reporting that removing the 5% grain import duty is “possible” according to the Agriculture Minister; it was noted that the duty could possibly be reduced as opposed removed and the statement added it was not expected to materially affect the market. This begs the question as to why it exists in the first place if that is the case, however we await the outcome of deliberations.
- In another statement from Russia it was noted that the traditional exporter will likely import in excess of 1.2 million mt of grain, having already come close to importing half a million mt in the season to December so far. Our own view is that the suggested 1.2 million mt is likely to be at the low end of the range given the volume of early season exports and the current pace of domestic demand.
- Given the requirement to import into a traditional exporting market, the current size of managed fund net shorts and a general tightness of supplies in traditional exporting nations we could well foresee an explosive upside if, and when, the markets decide to take cover.