For a short trading week quotes bean remained under pressure

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In the last week of March 26 to March 30, bean prices were mixed: wheat continued to decline, corn and soybeans showed a sharp increase. The main driver of market movement was the quarterly assessment USDA planting crops, which was a surprise for soybeans and corn. In the end, in the last week of March on the Chicago Mercantile exchange CME may contract for wheat fell by 2 percent from 460,25 to 451.00 USD/100буш, corn rose 2.7% from 377,25 to 387,75 USD/100буш, contracts for soybeans rose 1.6% to USD 1028,25 1044,75/100буш.
At the end of March at the Chicago Mercantile exchange CME may contract for wheat fell by 2.2% from 495.00 to 451.00 USD/100буш, corn rose 2.8% from 382.00 to 387,75 USD/100буш, contracts for soybeans fell 1% from 1055,50 to 1044,75 USD/100буш.
For a short trading week quotes of the bean were under pressure on Thursday, however, showed a rapid increase for soybean and corn, due to the quarterly forecast by the USDA for planting, which was worse than market expectations. In particular, evaluation of planting corn for the current season was reduced by 2.4% to 88,026 million acres, which was 1.6% worse than market expectations. A similar situation with soybeans, which crops are estimated in current year at the level 88,982 million acres, below last year’s values by 1.3% and market expectations of 2.4%.
In turn, the Outlook for sowing of wheat was unexpectedly high. In particular, the USDA estimates the planted areas at the level of 47,339 million acres, which is 2.3% higher than market expectations of 2.9% above last year. In particular, after “drying” the planned sowing spring wheat on the area of 12,627 million acres which is 14.7% above year-ago levels and 9.8% above market expectations.
In addition, for wheat has improved the condition of winter crops is influenced by waves of rain. So, in Kansas to the “good-excellent” estimated 13% of the area (+2P.p.), in Colorado up to 8%, Texas 12%(+2P.p.). Meanwhile, the overall figures remain weak, which hinders the falling prices.
In General, many regions have problems with early sowing. In particular, a significant delay in starting the sowing of Ukraine. The pace of planting by Brazilian farmers also delayed from last year’s rate, sowing of 96.5%.
The weather factor continues to hold the market, increasing its volatility. Forecasts of sowing areas in the United States, the delay of sowing in different regions, lack of moisture in Latin America, will support customers. However, high inventories of corn and soybeans in the United States, trade war United States and the risk of retaliation of China still hangs over quotes. Therefore, after corrective pullback long weekend buyers back to the market.
From the point of view of technical analysis, wheat can resume growth, soybeans and corn after the rapid growth may be subject to a slight correction amid profit-taking, however, more likely, at the end of the week, will keep growing.
For futures bean for the next week we review trade corridor for wheat at the level of 440-475USD/100 Bush,corn trading range at 380-395USD/100 Bush, at the SOE level 1030-1075USD/100 Bush.
In the CIS markets
According to Bloomberg, spot prices of Russian wheat (Wheat 12.5% FOB Novorossiysk) rose c beginning on March with 203,0 to $208,0 (+$5,0). Prices of Ukrainian wheat (Wheat 12.5% FOB Black Sea) reached $207,0 (+$3.0 the beginning of the month), the price of Kazakh wheat (Milling Wheat 12.5% FOB Aktau) caught up to the level of $197,5 (+us$6.5 from the beginning of the month).
According to Bloomberg, the spot price of Russian corn (FOB Novorossiysk) increased c started month to $199,0 (+$15,0), prices of Ukrainian corn (FOB Black Sea) increased to $199,0 (+$8,5).
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Andrew Shevchishin,
Senior analyst,
GK FOREX CLUB