Latest CRM Commentary

Cereals find support whilst soymeal charges higher ahead of Thanksgiving

Cereals

  • Cereals markets were quiet ahead of the Thanksgiving holiday in the US – Chicago will be closed tomorrow.
  • In the UK, DEFRA has published its provisional 2017 England regional production estimates [See chart of the day#1]. Year-on-year change in production overview:
    • Wheat: between +1.2% in the NW up to +15.1% in the NE;
    • Winter barley: between -3.5% in W. Midlands up to +15.1% in the Eastern region.
    • Spring barley: between -36.2% in the NW up to +34.4% in E. Midlands.
  • The recent pick up in demand for EU wheat – in particular the French origin – from Northern African countries like Algeria, Tunisia, Turkey or Morocco provided support although much more exports will be needed in the weeks ahead to reach the official targets.
  • The US Energy Information Administration reported the weekly US ethanol at 1.07M bpd – a record – and stocks at 21.9Mln bbls, the highest for the time of the season.
  • According to TR Lanworth analysts, US farmers have once again reduced their winter wheat planted area due to poor profitability and as such, the 2018 US winter wheat production is projected at 32.9MlnT (-4.6% yoy) vs 34.5MlnT in 2017.

Oilseeds

  • Rapeseed inched higher in sympathy with a rally in WTI prices which traded above $58/bbl for the first time since July 2015 due to the Keystone pipeline incident in South Dakota. However, crude lost momentum in the afternoon after the EIA reported a less than 2Mln bbls decline in US inventories, less than expected by the market. Operators will now focus on the OPEC Nov. 30 meeting.
  • The best performer was once again soymeal which posted a 1.8% gain today or a 4.4% jump in the last 4 trading sessions amid strong fund buying due to ongoing concerns in Argentina where La Niña could damage the crop.Short-term though, the weather forecast continues to indicate beneficial showers for the core producing provinces of Cordoba and La Pampa.
  • With funds buying soymeal and selling soyoil ahead of the Thanksgiving holiday, the latter commodity could not hold onto yesterday’s gain.

Chart of the day#1: provisional 2017 England production estimates


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