European grain markets were subdued, as Donald Trump was sworn in as U.S. president ...
Good morning, Farmer Family ...
US farm markets were closed yesterday, in observance of Martin Luther King Jr. Day. It has been also the inauguration day, with President-elect Trump sworn into office.
Chicago corn prices hit a more-than-one-year high, with soybeans also rising on worries of a drought in Argentina and rains in Brazil.
- Notably, the most active corn contract on the Chicago Board of Trade gained 1.03%, hitthing the highest since Dec. 8, 2023, by 0444 GMT.
- CBOT soybeans added 1.28%, while wheat rose 1.76%.
- The resumption of the trading activity this morning could be animated by the interpretations of the inaugural speech and the first measures taken by President Donald Trump.
- The grain market seems to welcome positively the fact that the question of customs duties on products imported into the United States will be dealt with later.
- The optimism concerns above all the hypothetical absence of a trade war between the United States and China.
- Also, the US ethanol industry, for its part, welcomes the announcement of the relaunch of the production of gasoline cars in the United States and the possibility of using, if necessary, a 15% ethanol incorporation rate all year round, which is not the case today.
South America
Brazil's soybean harvest for the 2024/25 season had reached 1.7% of the planted area as of last Thursday, agribusiness consultancy AgRural said.
- That was the lowest level for this time of year since the 2020/21 cycle.
- Work in the fields has been affected mainly by excessive rains in top grain-producing state Mato Grosso, where the harvesting pace so far is the slowest ever in the data series starting 2010/11, AgRural said.
- Harvesting by Thursday was up from the 0.3% registered in the previous week but well below the 6% seen at the same time last year.
- Adverse weather conditions have also impacted sowing of Brazil's second corn crop.
- Second corn planting in Brazil's key center-south region had reached 0.3% of the expected area by Thursday, AgRural said, below the 4.9% seen a year earlier and the slowest pace since 2021.
Recent rains in Argentina's agricultural heartland have not alleviated concerns that ongoing drought could further hurt crop yields, the Rosario grains exchange said in a report released on Monday.
- Notably, the grains exchange noted in its weekly crop weather report that the precipitation varied widely over the area.
- It also urged more monitoring going forward.
- Last week, the exchange cut its 2024/25 corn crop forecast to 48 million metric tons.
- It also acknowledged that soybean production will fall short of its prior forecast of between 53 million and 53.5 million tons, but did not provide a new estimate.
Europe
European grain markets ended mixed.
- Benchmark March milling wheat on the Paris-based Euronext closed down 0.2% at 226.25 euros ($234.76) per metric ton.
- It earlier touched its lowest since Dec. 5 at 225.00 euros, but found a chart support and rebounded.
- MATIF corn Mar was up €0.25/t to €214.25/t, while Feb rapeseed inched up €2.25/t to €532/t.
- Wheat prices eased, pressured by the euro strength against the dollar.
- Investors reacted to indications Donald Trump may not immediately impose trade sanctions.
- Trading, however, was thin, with a holiday closure for U.S. markets depriving impetus.
- The corn market was still technically bullish, though it could be near the end of the rally with Brazilian planting ahead.
- Finally, rapeseed followed Canadian canola in its rebound, in the context of absence of immediate application of US customs duties on Canadian products.
- However, the topic is strategic and could lead to a high volatility of prices in Winnipeg in the coming days.
Ukraine
Per latest operational data from the State Customs Service of Ukraine, as of January 20, Ukraine has exported 24.193 mln tonnes of grain and leguminous crops since the beginning of the 2024/25 MY, of which 1.961 mln tonnes were shipped this month.
- In terms of crops since the beginning of the current season were exported wheat for 10.334 mln tonnes; barley for 2.021 mln tonnes; corn for 1.422 mln tonnes.
- Total exports of Ukrainian flour since the beginning of the season as of January 20 are estimated at 40.2 thousand tonnes, including wheat flour for 36.8 thousand tonnes.
- Meantime, in the oilseeds market, the growth of sunflower oil cost in the export direction, pushed up sunflower prices significantly.
- Notably, demand prices rose by 1000 UAH/t on average and were announced within the range of 25000-26400 UAH/t CPT.
- Some companies declared demand prices from 24,500 UAH/t CPT, noting low supply.
- It should be noted that there was no significant increase in the number of offers at prices from 25000-25500 UAH/t, but some companies still managed to form some stocks of raw materials.
- Conversely, no significant price changes were observed in the domestic market of rapeseed.
- Locally, there was a high demand from export-oriented companies for oilseed residues, as a result of which individually purchase prices could exceed the previously established market ranges.
- But the demand from processors was moderate, with single demand prices ranging from 21000 to 23500 UAH/t CPT.
Russia
The weather in the main Russian grain regions remains abnormally warm.
- However, according to the Russian state weather forecasting agency, winter crops are performing normally despite the absence of snow cover.
- On the demand side, weekly grain exports were estimated last week at 0.41 million tons, including 0.39 million tons of wheat, per latest port data.
- That was down from the previous week's 0.52 million tons of grain, including 0.43 million tons of wheat, data showed.
- Sovecon estimates January wheat exports to be 2.0 million tons against 3.6 million tons a year earlier.
- IKAR estimates January wheat exports at 2.2 million to 2.5 million tons, down from 3.8 million tons in December.
- In this context, Russian wheat export prices declined last week.
- Notably, according to the IKAR, the price of Russian wheat with 12.5% protein for free-on-board (FOB) delivery in the first part of February was at $234 a metric ton, down $3 from the previous week.
- Sovecon put prices for Russian wheat with the same protein content and delivery terms at between $237 and $240 a ton, compared with $235 to $240 the previous week.
- Russian FOB prices are expected to remain mostly unchanged, but current levels seem relatively high to attract new demand.
- The entry of more competitive wheat from Argentina and Australia, into the international market, has weighed on prices.
- However, sharp frosts, with temperatures dropping to minus 20 degrees Celsius, could pose a threat for winter crops.
- Also, from Feb. 15, a very low export quota of 10.6 million tons of wheat for the second half of the season to June 30 will be applied on the Russian market.
- As for the other products, Domestic 3rd class wheat, European part of Russia, excludes delivery was at 15,525 rbls/t, +175 rbls/t (Sovecon).
- Sunflower seeds were at 38,275 rbls/t, -825 rbls/t (Sovecon).
- Domestic sunflower oil was at 100,175 rbls/t, -2,650 rbls/t (Sovecon).
- Domestic soybeans were at 39,700 rbls/t, +1,250 rbls/t (Sovecon).
- Export prices for sunflower oil was at $1,055/t, -$25 (IKAR).
- White sugar, Russia's south was at $590.82/t, +$14.08/t (IKAR).
China
China's imports of canola from Canada, plunged in December, Chinese customs data showed.
- Notably, December shipments from Canada dropped 12% from the same period the year before to 588,181 metric tons.
- That was the first year-on-year decline in seven months and the smallest shipment volume since August.
- Beijing in September launched a one-year investigation into rapeseed imports from Canada after Ottawa imposed tariffs on Chinese-made electric vehicles, prompting importers fearing retaliatory anti-dumping duties to scale back purchases from Canada.
- China's total rapeseed imports rose in 2024 to 6.39 million tons compared to 5.49 million tons in 2023, customs data showed.
- Nearly all of that, at 6.13 million tons, arrived from Canada, amounting to $3.29 billion.
- China is also considering trade restrictions on imports of dairy and pork from the European Union.
- The country's burgeoning meat and dairy sectors are struggling with oversupply challenges due to a slowing economy and declining consumption, although the anti-dumping and anti-subsidy investigation is a tit-for-tat response to the bloc's tariff plan for China-made electric vehicles.
- China's hog farms have come out of a loss-making phase, while losses in cattle and dairy farming have been partially alleviated.
- Thus, to fully reversing the difficulties especially in cattle and dairy production, still requires further efforts.
- Authorities are already investigating beef imports as part of efforts to protect domestic producers.
- Grain production must be firmly secured.
- On this wake, the ministry pledged to increase the scale of corn storage, strengthen policies for soybean production and sales, and carefully manage the timing, pace, and scale of grain imports.
- It will also implement targeted field management measures and focus on disaster prevention and disease control for winter wheat and winter rapeseed crop after the Lunar New Year.
Southeast Asia
Malaysian palm oil prices rose for a second session, supported by strength in Dalian vegetable oils and bargain buying.
- Notably, the benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed 0.38% higher.
- Palm oil prices started to be offering at a discount against soyoil and sunflower oil.
- Also, margins improved recently at the key destination markets, especially in India.
- Dalian’s most-active soyoil contract climbed 1.98%, while its palm oil contract was up 1.3%.
- However weak palm oil exports in the Jan. 1-20 period limited gains.
- Exports of Malaysian palm oil products for Jan. 1-20 are estimated to have fallen between 18.2% and 23%, according to cargo surveyors.
Australia
Australian canola exports have made a solid start, this season.
- On this wake, WA canola bids started the week making back around $5 of Friday’s losses.
- It was bid $845 FIS.
- In the east of the country canola bids were up around $5 with bids $796.
- For cereals, WA wheat was largely unchanged with bid around $370.
- Conversely, barley was well supported with $340 trading in the Kwi PZ on Clear Grain Exchange around $7 higher than Friday’s bid.
- In the east of the country wheat was unchanged $344 and barley around $305.
- Delivered Darling Downs markets have been largely unchanged to begin the year.
- Wheat was bid around $334 and barley $314.
- Sorghum was bid around $5 higher over the last week, to $323.
- Pulses continued to be well supported with faba bids $645 delivered
- Geelong for Mar-May delivery and chickpeas continuing to hold around $910 delivered Brisbane.
International grain and oilseed tenders & trade
- Iran's state-owned animal feed importer SLAL has issued international tenders to purchase up to 120,000 metric tons of animal feed corn, 120,000 tons of feed barley and 60,000 tons of soymeal. The deadline for submission of price offers is Tuesday, Jan. 21, with shipment for all grains sought in March and April. The corn can be sourced from Brazil, Europe, Russia, Ukraine or elsewhere in the Black Sea region including Turkey. The barley can be sourced from the European Union, Russia, Ukraine or elsewhere from the Black Sea region including Turkey and Kazakhstan. The soymeal can be sourced from Brazil or Argentina only. Iran was offering payment in all the new tenders via two banks, one in Iraq and one in Turkey.
- Algerian state agency ONAB has issued international tenders to purchase up to 240,000 metric tons of animal feed corn and about 50,000 tons of soymeal. The deadline for submissions of price offers is Tuesday, Jan. 21. The new tenders were seen as indicating that Algeria may have made no purchase, or only minor purchases, in its previous tenders for corn and other animal feeds on Friday. The corn is sought sourced from Argentina or Brazil only in up to six consignments of 30,000 to 40,000 tons, with shipment by Feb. 20 at the latest. The soymeal is for shipment by Feb. 25 at the latest and can be sourced from optional origins.
Outside markets ...
Oil prices settled lower, in early settlement, due to the U.S. Martin Luther King Jr. Day holiday.
- Notably, Brent crude futures closed down 0.8%, while U.S. West Texas Intermediate crude futures were down 1.2%.
- However, there was no settlement for WTI contracts due to the U.S. holiday.
- U.S. President Donald Trump sworn as President, and said he would immediately declare a national energy emergency, promising to fill up strategic reserves and export American energy all over the world.
- Trump and his allies have signaled they would use the authority to rapidly approve new oil, gas, and electricity projects that typically take years to permit.
- Trump, will also sign an executive order focused on Alaska, that could allow shipments of liquefied natural gas to other parts of the United States and to allied countries.
- Trump is also expected to make policy announcements that include an end to a moratorium on LNG export licences as part of a wider strategy to strengthen the economy.
- Also, the new sanctions against Russia could be short-lived depending on Trump's actions, as he has promised to help to end the Russia-Ukraine war quickly, which could involve relaxing some curbs to enable an accord.
- Russian President Vladimir Putin who congratulating with Trump for the taking office, said he was open to dialogue with the new U.S. administration on Ukraine and nuclear arms.
- Easing tension in the Middle East also kept a lid on oil prices.
This morning, oil prices ticked lower.
- Brent crude futures were down 0.44%, as of 0705 GMT, while West Texas Intermediate crude futures were down 1.16%.
- Trump did not impose any sweeping new trade measures right after his inauguration on Monday, but told federal agencies to investigate unfair trade practices by other countries.
- Limiting losses, Trump also said his administration would "probably" stop buying oil from Venezuela.
- In the U.S., North Dakota's crude output was estimated to be down by between 125,000 and 150,000 barrels per day due to extreme cold weather and related operational challenges, the state's pipeline authority said.
The Baltic Exchange's main sea freight index eased for a fifth consecutive session, dropping about 3%, as rates dipped across all vessel segments.
- Notably, the main index dropped 30 points, or 3.04%, to 957 points for its lowest since June 2023.
- The capesize index slipped 66 points, or 4.74%, to a two-week low of 1,327 points.
- The panamax index snapped its two-day winning streak, falling 4 points to 893 points, its lowest since February 2023.
- The supramax index was down 20 points at 727 points.
U.S. stock indexes were closed, meanwhile European stocks jumped.
- European equity markets were firmly in positive territory in afternoon trading after the Wall Street Journal reported Trump would not impose import tariffs immediately after he's sworn in later on Monday.
- The pan-European STOXX 600 rose 0.3%, with the region's main indices all up roughly 0.5%.
- MSCI's All-World index was last up 0.4%.
This morning, global shares were mixed.
- Tokyo’s Nikkei 225 index gained 0.3%, Hong Kong’s Hang Seng index rose 0.9%, the Shanghai Composite index edged 0.1% lower, Australia's S&P/ASX 200 gained 0.7%, South Korea's Kospi slipped less than 0.1%.
- Shares of Chinese property developer Country Garden jumped 17.5% after it got a reprieve on its deadline for working out an agreement with its creditors.
- Some analysts said Trump's inauguration would inject optimism into global markets, while others said the threat of higher tariffs might hurt sentiment.
- The “America First Trade Policy” memo of President Trump, has indicated he would take no immediate action on raising tariffs, alleviating immediate concerns about threats of double-digit tariffs on all imports.
- Also, worries about the effects of Trump's policies on China have eased somewhat as both sides have pledged to work to improve relations.
- Meantime, France's CAC 40 gained 0.1%, Germany's DAX was flat, Britain's FTSE 100 gained 0.1%.
- The future for the S&P 500 was up 0.3% and that for the Dow Jones Industrial Average gained 0.4%.
The dollar fell broadly, falling particularly hard against the currencies of the United States' largest trading partners.
- The dollar fell 1.15% against the Canadian dollar to C$1.4319 and dropped 1.4% against the Mexican peso.
- The yuan strengthened sharply, leaving the dollar down almost 1% on the day at 7.274.
- The Australian dollar rose 1.2% on the day to $0.6262.
- The euro, meanwhile, rose 1.3% on the day to $1.0401, posting its largest one-day rally since late 2023.
- President Trump promised a "brand new day of American strength".
- He has stoked expectations of an immediate slew of executive orders and, in a reminder of his unpredictability, launched a digital token on Friday, which soared above $70 before sliding to around $50 as traders turned uneasy.
- Trump has threatened tariffs of as much as 10% on global imports and 60% on Chinese goods, plus a 25% import surcharge on Canadian and Mexican products, duties that trade experts say would upend trade flows, raise costs and draw retaliation.
This morning, the dollar was unchanged at 155.64 Japanese yen. The euro cost $1.0362, down from $1.0416.
Settlement Prices for Key Commodity, Index & Currencies
- Chicago wheat Mar contract, the market was closed;
- Kansas wheat Mar contract, the market was closed;
- Minneapolis wheat Mar, the market was closed;
- MATIF wheat Mar was down €0.25/t to €226.5/t;
- ASX wheat Mar contract was down A$0.5/t to A$329.5/t;
- US DWI Cash (durum wheat index), the market was closed;
- 1CWAD (Canadian durum) avg spot price was down C$1.3 /t to C$320.64/t.
- EDW (EU durum) Mar contract was unchanged to €316.5/t;
- Chicago corn Mar contract, the market was closed;
- MATIF corn Mar was up €0.25/t to €214.25/t;
- Chicago soybeans Mar, the market was closed;
- Winnipeg canola Mar contract was up C$15.9/t to C$631.9/t;
- MATIF rapeseed Feb was up €2.25/t to €532/t;
- Brent crude Mar, the market was closed;
- WTI crude Mar, the market was closed;
- BADI (Baltic Dry Index) was down 30 points to 957;
- Dow Jones, the market was closed;
- S&P 500, the market was closed;
- NASDAQ Composite, the market was closed;
- US dollar index (Mar '25), the market was closed;
- AUD/USD firmer at US$0.6273;
- USD/CAD weaker at $1.4309;
- EUR/USD firmer at $1.0416;
- USD/RUB weaker at ?100.9687.
Author: Sandro F. Puglisi
Source: Me, AAFC, ABARES, Abiove, AHDB, Amis, Argus Media, Baltic Exchange, Buenos Aires Grain Exchange, CFTC, CGC, China AgMin, Clear Grain Exchange, CME, Conab, Copernicus, CWG, ECB, ECMWF, EIA, Euronext, European Commission, Eurostat, FAO, FCI, FED, GASC, GIWA, ICE, IEA, IGC, IKAR, JRC MARS Bulletin, LSEG, MPOB, National Bureau of Statistics of China, ODC, OIAC, RBA, Reuters, Rosario Grain Exchange, Russia AgMin, Russian Grain Union, S&P Global, SovEcon, StatCan, USDA, UA AgMin, and Others ...
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