Amid a generally “bad” day for grains and oilseeds, the market for Chicago Soft Red winter wheat gained one percent.
- Chicago March 2024 Wheat rises 7 cents/bu to 602 cents/bu;
- Kansas March 2024 Wheat down 0.25 cents/bu to 618.25 cents/bu;
- Minneapolis March 2024 Wheat rose 3 cents/bu to 696.25 cents/bu;
- MATIF wheat March 2024 down €2/t to 209 €/t;
- Black Sea wheat futures have been delisted since August 11, 2023;
- May 2024 corn down 4 cents/bu to 446.5 cents/bu;
- May 2024 soybeans down 10.75 cents/bu to 1197.5 cents/bu;
- May 2024 Winnipeg canola down CAD 1.10/t to CAD 599.40/t;
- MATIF rapeseed May 2024 decreased by €10.50/t to €410.75/t;
- ASX March 2024 Wheat unchanged at A$366/t;
- ASX March 2024 Barley unchanged at A$298.50/t;
- The AUD dollar fell by 2 points to $0.6520
International
Futures markets appear immune to US domestic fundamentals. If you give weight to deliverable stocks, the US futures curve needs to do some work as we begin deliveries in March. Historically low inventory levels and increased shipments from Duluth, Minnesota, are at odds with a market that offers little to no support. Meanwhile, from a global perspective, the weight between the EU and the Black Sea has pushed Russian FOB values back near the June 2023 lows.
I constantly accuse myself of overcomplicating things – it's worth remembering that China is the driver of global ag stocks and its domestic futures markets offer little inspiration. Corn and hogs are both near long-term lows on the Dalian Commodity Exchange (DCE), a sobering fact considering the pork sector accounts for a large portion of China's domestic feed demand. Chinese stocks recovered slightly, suggesting to some that government initiatives are finally having an impact. What is interesting is that both Goldman Sachs and Citi are extremely optimistic following the Chinese central bank's announcement that it will reduce the amount of reserves banks must hold. The change would bring more than $140 billion back to the economy.
Indonesia will go to the polls on February 14 to elect its next president. President Joko Widodo will step down after ten years in office.
Ahead of the USDA crop report, US corn futures hit their lowest level in three years. South American production and a lack of Chinese activity due to Chinese New Year are driving values lower. Brazil's national agricultural agency, CONAB, will release its South American production estimates this evening.
Australia
Local markets were somewhat subdued last week, with spot demand linked to export demand being the main feature.
ASX futures on January 25 tested recent lows, settling at A$375/t, while Melb ASW1 for the current crop fell $1-2/t to close at $366/t for March delivery.
In the north, the recent decline in sorghum values has found some support, albeit quietly and with only a few heads rolling. Discussions about export parity were confirmed by Spotbox demand, but mass demand still appears to be ignored. The true test of value will come after Chinese New Year and after the USDA WASDE report. This will be the best barometer of sorghum export parity once traders are able to input physical numbers into their global corn balance sheet.
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