October 20th

Market Report

USDA crop progress report, released last night, showed that corn and soybean harvest is progressing well with 52% of corn and 60% of soybeans harvested. Improving soybean crush margins in China has reignited strong buying from the country with trade rumours citing 40 boats booked. Improved bean shipments and a renewed global interest has spurred the domestic market forward. Chicago beans Nov-21 were trading up 6 cents and May-22 were trading up 9 cents at time of writing. Ethanol margins remain highly profitable at current rates with Brent Crude hitting a trading high today of $85.13/barrel. US corn sales of 976kt were above expectations and sales remain above USDA projections with Chinese import data yet again arguing the USDA are understating demand. Some support was seen on the back of higher fertiliser costs resulting in lower yields this growing season. CBOT corn Dec-21 was trading unchanged.

US wheat markets were mixed. Market continues to look toward the rising export tax and FOB prices in Russia are starting to make HRW competitive for the 2022 positions. The export tax rises $2.50 from tomorrow to $61.30, the 2-day calculation adds another $5 for next week and both nominal FOV values and CME futures argue for the tax to hit $90 by the start of 2022. Substantial increases. Published FOB price on the Moscow exchange yesterday was $297.90 and if the proposed tax changes are implemented (moving to FOB rather than an average), published prices will move towards current values even faster. Chicago Dec-21 was unchanged, Kansas Dec-21 was down a couple of cents and Minneapolis Dec-21 was up 5 cents at the time of writing.

EU wheat exports only marginally increased over the week to October 19th,up by 270kt. China feed buying alongside the continued shipments to Algeria and North Africa continue. Dec-21 settled down €0.25 on yesterday at €273.75/t and May-22 settled down €0.25 on yesterday at €264.50/t. London futures followed Paris with Nov-21 settling down £0.50 on yesterday at £206.50/t and May-22 settling up £0.10 on yesterday at £215.00/t.

Rapeseed continued to surge, supported by stronger veg oil prices after the Malaysian Palm Oil council cut its forecast of 2021 palm oil yesterday. Matif Nov-21 rapeseed settled up €15.50 on yesterday at €698.25/t as the contract gets squeezed and May-22 settled up €4.25 on yesterday at €652.25/t. Malaysia, the second largest palm oil producer has approved 32,000 work permits for overseas workers and with more labour, production would increase. A rebound in production would remove some of the support from palm oil prices which would also relay to rapeseed prices – the extent of the impact and whether it will have a direct impact this season is open to debate …