WHEAT

US markets have managed minimal gains on the week as signs of fund short-covering entered the market ahead of the long Thanksgiving weekend.

Although demand for old crop remains lacklustre, some support is surfacing from lower US winter wheat crop ratings.

This has been reinforced by a few concerns over new crop production due to lower soil moisture levels compared with last year, and a further expected drop in US wheat plantings for the 2018 harvest.

EU prices are marginally weaker on the week, with little change in market dynamics to report. Tunisia’s recent purchase looks like Black-Sea origin, with France again well beaten on price.

Given the Black Sea region’s continued aggressive stance, crop bureau FranceAgriMer recently lowered its projection for French non-EU soft wheat exports from 10.2mln t to 9.9mln t, increasing carry-out stocks by 0.1mln t to 3.3mln t in the process.

Total EU soft wheat export a/o last week were still down 23% year on year, reported at 7.5mln t.

UK futures are also slightly weaker, although they have bounced from the three -month low witnessed earlier in the week.

The market still remains driven by merchant short demand. As the seasonal logistics kick-in, growers able to load over this period may be able to take advantage of decent spot premiums against the deferred positions, where long-holders are more confident to offer supplies into the market, albeit at the market carry.

In summary, global markets continue to show little change in their grind-lower trend.  Northern hemisphere weather, in general, remains non-threatening, although southern hemisphere production remains uncertain.

EU markets and export prospects remain at the mercy of aggressive Black Sea shipping campaigns, and the UK, with a balanced demand/supply sheet, is seen trading in a narrow range.

Farmers who want to take risk off the table should look at increasing their percentage sold in the light of the current market.

OSR

With Thanksgiving in the US this week there has been little news of note from the soy complex.

We continue to keep a close watch on developing crops in South America. It seems unlikely that last year’s record production will be repeated, but we will still see ample supplies this campaign.

Prices on the Matif rapeseed futures are largely unchanged on the week with UK domestic prices coming under pressure from the rally in sterling.

The pound found support last week as inflation continues to underpin thoughts about further interest rate rises and on the back of news that the UK is reportedly getting close to reaching a financial settlement with the EU on the Brexit divorce bill.

Despite the Office for Budget Responsibility downgrading its growth forecast, sterling has maintained its strength after an uneventful Budget on Thursday, taking the shine off what have been the recent market highs.

FERTILISER

Granular urea update

Buying has been limited since the scrapping of the latest Indian tender which left producers with nearly 800,000t of urea to resell.

Producers have had to accept lower values to move urea that was earmarked for the tender, to avoid building stocks. Most markets have seen prices slip as a result.

Egyptian producers have sold at $280/t FOB, down $27/t from the highs seen a fortnight ago. Today’s pound/dollar rate puts replacement urea at £265/t on farm in the UK.

In most countries, importers are stretching out existing inventories and delaying buying until the market stabilises.

A new Indian tender would be the most obvious event to stabilise the market, and India has to buy and buy soon. Its stocks at the end of October were about 681,000t lower year on year and it has made 588,000t more sales between April-October compared to the same period last year.

Once India does return to the market there will be a surge of buying due to pent-up demand from those that have deferred enquires, which would lead to a price rebound

SOURCE GLEADELL