Wheat futures fell further on Thursday, under pressure from weak demand, and an improving US weather outlook, and strong export sales data did little to support soybean prices.
The United Nations food agency said food prices edged up in March, thanks to a rally in sugar and vegetable oil.
But prices remain near a 7-year low, and the index is still down by around 12% from last year.
Disappointing wheat sales
US weekly wheat exports sales were very weak.
For sales in the current season, there were more cancelations that new orders, leaving the total number of booked sales 58,100 tonnes lower week on week.
Markets had been expecting positive export sales of 150,000 to 350,000 tonnes.
Sales for 2016-17 were a bit more encouraging, at 159,300 tonnes, slightly over the top end of expectations, but the overall number was still “terrible,” in the words of Joe Lardy at CHS Hedging.
Mr Lardy noted “big cancellations in spring wheat mainly to South East Asia”.
Darrell Holaday, at Country Futures, said the wheat export figure was “simply not a good number and more confirmation that USDA is still too high with current year wheat exports”.
Rains for the Plains?
Wheat is also under pressure from ideas that wet weather may be on the way for the US Plains.
But there is a significant degree of uncertainty over this, as main weather models are disagreeing on what is in store for the 6-10 day period, ranging from significant rainfall, to almost none.
“The wide range of model solutions certainly keeps confidence low,” said Kyle Tapley, at MDA Weather Services.
Chicago May wheat futures finished down 1.1%, at $4.57 a bushel.
Drought helps French exports
France is gaining sales from a drought in the Maghreb, which is boosting import demand from North Africa.
France exported 1.1m tonnes of soft wheat outside the European Union in February.
Morocco was the biggest destination, followed by Algeria.
French exports this season are now outpacing last year by around 2%.
Egypt buys a little wheat
Eypt’s state grain buyer Gasc bought 60,000 tonnes of French wheat in a tender.
The wheat was bought from Casillo at $181.69 a tonne, plus $10.65 a tonne freight.
Although prices were up from the last tender two weeks ago, both participation and sales were low, indication traders are still wary of the destination due to an ongoing dispute over acceptable levels of ergot.
In Paris, wheat futures took little cheer from the news, with the May contract ending down 0.3% at E153.25 a tonne.
Good corn, soybean export sales
Soybean export sales for this season came in above expectations, at 420,400 tonnes, compared to forecasts of 150,000 to 350,000 tonnes.
But export sales of soybean products were disappointing.
Soymeal export sales for this season were just 23,300 tonnes, compared to expectations of 75,000 to 250,000 tonnes, although there unexpected sales of 29,300 tonnes for the next season.
Soyoil saw net-negative sales, thanks to cancelations, leaving a net-cancellation of 7,600 tonnes, where markets were looking for
Corn export sales came in in-line with expectations, with a hefty 945,300 tonnes for this season, and 175,100 tonnes in 2016-17.
Chinese switch corn to soybeans
The Chinese agriculture ministry announced a plan to cut the country’s corn 8.2m acres by 2020.
The move is expected to boost domestic soybean production, although a Chinese official said that the country would not attempt to resist imports.
But the USDA’s bureau in Argentina saw an opposite trend for next season, with corn rapidly winning acres over soybeans.
Brazilian hopes cut
The Brazilian government cut its forecast for this season’s soybean crop by 2.2m tonnes to 98.98m tonnes, although this is still a record level.
The Brazilian government lifted its forecast for 2015-16 corn production to 84.66m tonnes, from the 83.52m tonnes forecast last month.
Spread narrows
May soybean futures finished down 0.4%, at 9.04 ½ a bushel.
The soybean corn spread is continuing to narrow down, after jumping wide last week.
May corn rose by 1.0%, to 3.61 ½ a bushel. The front month contract is continuing to see the sharpest gains, suggesting squeezed prompt markets as farmers hold onto supplies.
Crop upgrade
Coffee and sugar futures are still under pressure from the Brazilian real, which touched two-week lows on Thursday, as the central bank warned of private sector bankruptcies to come.
May raw sugar futures hit a one-month low of 14.43 cents a pound, down 1.3% on the day.
And coffee markets had to contend with an upgrade to Brazilian production hopes from the IBGE.
Hopes for the arabica crop were lifted by 300,000 bags to 39.2m bags.
And Brazil’s robusta coffee crop was seen at 11m bags compared to the 10.8m bags forecast in March.
May arabica futures finished down 1.4%, at 119.80 a pound, a one-month low.
But robusta settled up, although prices trimmed an early surge that saw futures up 4% in the opening minutes of the session.
May robusta finished up 1.8%, at $1,496 a tonne.
Nigerian production hopes raised
Top cocoa grower Ivory Coast will harvest 1.6m tonnes this year, down from 1.8m tonnes last season, a senior finance ministry official was reported saying.
But an official at the Cocoa Research Institute of Nigeria forecast production in that country at 350,000 tonnes, compared to earlier forecasts of 260,000 tonnes, citing high input application.
And much needed rains are expected across the key West African cocoa growing region.
New York July cocoa finished 1.4% down, at $2,872 per tonne.
- See more at: http://ingredientnews.com/articles/wheat-extends-losses-after-dismal-export-numbers/#sthash.U51RixBI.dpuf
