Changes in the USDA Report Have Little Effect on Markets
By ODA UK | Published at
The main news on agricultural markets was publication of the USDA monthly report as the European session closed.
In wheat, 2018-2019 stocks were revised higher for the United States (+860KT) and globally (+5.1MT), which had little effect on Chicago prices. Indeed, wheat prices in Chicago were already sinking in connection with the U.S. crop progress report before the USDA's monthly report was released. U.S. winter wheat ratings improved sharply on the week (+4 points) to 60% "good to excellent", a positive level compared to past data. Planting for spring wheat and maize started in the United States this week, and progress is similar to last year at this time with 1% of spring wheat acreage and 2% of maize acreage sowed.
Algeria returned to the market to cover its needs for June. This enabled the May-19 expiry to hold steady before the USDA report was published and finish the session slightly lower. Egypt's likely rejection of a French wheat shipment because of ergot levels higher than GASC specifications did not affect prices. At the same time, Euronext wheat expiries for the 2019-2020 campaign sank in the U.S. market's wake.
In maize, the USDA's upward revisions of world (+5.5MT) and U.S. (+5MT) inventories seemed to have already been integrated by traders since Chicago maize prices were at equilibrium when the European market closed. Euronext maize finished the session slightly higher.
On the oilseeds market, soya prices were at equilibrium as Euronext closed. Indeed, the USDA report revised 2018-2019 world production slightly lower (-500KT) even after revising Brazilian production 500KT higher to 117MT. Ending stock was 107.4MT, or 1MT below expectations.
Palm oil rose with the outlook for a drop in Malaysian inventories between February and March. Soybean oil also slumped.
Despite gains by oils, rapeseed prices finished the day lower due to an increase in the euro-dollar exchange rate and technical considerations.