November 30th

Market Report

Has the market peaked? The omicron certainly has the market worried.

Markets continued their decline yesterday, all products included, in the wake of last Friday's session, marked by the fears raised by the new Covid variant. It is difficult at this stage to know the real consequences on the world economy of this new strain that is shaking the markets. The downturn was accentuated from 2pm when Abares published its estimates for Australia. A record wheat production has been posted at 34.4 Mt, barley at 13.3 Mt, and canola at 5.7 Mt. These figures are above expectations and confirm that rains have been beneficial on volumes but the negative impact on quality is still difficult to assess at this stage.

On the international scene, Egypt surprised the market by buying no less than 600,000 t of wheat, split between 240,000 t from Romania, 240,000 t from Russia and 120,000 t from Ukraine. The French origins were not competitive.

Maize also lost ground in the wake of wheat and harvest pressure in Ukraine.

Rapeseed prices fell sharply yesterday in the wake of vegetable oils, and amid fears of a drop in demand for biofuels due to the health situation.

The same is true for palm oil in Kuala Lumpur, where prices are at their lowest for three weeks.

The dollar is weaker this morning at 1.13 against the euro and 74.75 against the rouble. Oil is back down in New York this morning at 68.50 usd/barrel.

American market
Wheat prices fell sharply in Chicago following the Abares report on Australia, but also after the USDA posted a crop rating for winter wheat of 44% as good to excellent, unchanged from last week, but above traders' expectations.

Soybeans also lost ground, despite a good crushing activity that is expected to be confirmed for the month of October. The figures will be posted on Wednesday. In Brazil, 91% of soybeans are reportedly planted as of November 26. This is ahead of the average for the period, reflecting good planting conditions.

The US corn and soybean harvest is nearing completion, with an estimated 95% done by 21 November.

Yesterday, funds were net sellers in 15,000 lots of corn, 8,000 lots of soybeans and 12,000 lots of wheat.

Our view - we consider this to be a sell off, maybe a pre Xmas one. We're encouraging growers to sell both new and old crop wheat, with an idea to look at cash settle/options in the new year. M