One reason that the market has been struggling to rally, is competition from less expensive Ukrainian corn that is said to be offered at $168/mt, compared to the US at $189.
Talk that China will spend money in an effort to increase storage and attempt to increase corn production is offering weakness to the market; they are making efforts to become more self-sufficient and increase their food security.
This week’s weather forecast for South America looks mostly favorable for the corn crop in both Brazil and Argentina.
Traders are awaiting Friday’s WASDE report. Not much change is expected in regards to the US corn numbers. However, the focus will likely be on Brazil and just how much the USDA may adjust their production forecast.
Brazil soybeans are being offered at $413/mt, versus the US at $447. Additionally, Argentinian meal is also below US offers at around $372 per ton, compared with $397 here.
There is some talk that Brazil will start to dry out in about two weeks. If this turns out to be true, it could offer stress to the later planted crops.
Indonesia announced an increase to their domestic biofuel mandate. Ultimately this may lower their exports and affect both the palm and soybean oil markets. Palm oil is trading up 2.4% at a six-month high.
India’s February veg oil imports are down 18% for the month, and the lowest in two years.
Russian wheat export values are said to have made new lows yesterday around $198/mt. For reference, US SRW offers are around $239, which keeps the US uncompetitive on the export market.
Algeria is said to have purchased between 600,000 and 900,00 mt of wheat on a tender $38/mt cheaper than the previous tender.
Increased export competition from the Black Sea and Argentina has led to sharply lower Australian wheat futures, which in turn is offering weakness to the US market.
Some precipitation is in the forecast for the US Plains on Wednesday and Thursday which should give winter wheat conditions a boost.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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