Bulls Retreat in Grain Markets in Europe

European Grain Markets

• After the large-scale appreciation in grain markets of recent days, yesterday it is expected a correction in the wheat and corn markets in Paris. The decline is partly due to the fact that some participants are taking recent profits. Others believe that this Christmas rise is just a “noise” and should not be given any other meaning, such as a reversal of the downward trend. Bulls need to break through serious resistance before that happens.
• Rapeseed, which traded in a large range, remained firm yesterday with the support of canola and rising soybean prices. However, the increase in covid cases in China, despite lifting some of the restrictions, is suppressing oils for the time being.
• Interesting are the positions of the funds in Paris, which seem to reverse the trend of shortening. Wheat, which has been shortening by 20k in recent weeks, last week from 9k net short positions fell to 4.5k. Rapeseed also lowered net shorts by 4.2k to 34.6k. Only corn continues to shorten by 0.7k reaching 2.6k net short.

American Grain Markets

• With a long weekend ahead in America (January 2 non-working for CBOT) and softer weather forecasts yesterday wheat and corn in the US fell slightly, mostly due to profit taking from the recent appreciation. With the retreat of the Arctic cold and storm, it is time to realistically determine what the impact on winter crops is.
• In the south, in Argentina, sowing is still lagging far behind and worries market participants. The latest data show a 9% lag in sowing of soybeans compared to last year, with only 70% of the projected area sown due to drought. According to local farmers, after mid-January the opportunities for sowing will begin to run out. As a result, soybeans continue to rise on CBOT, reaching a 6-month high.
• For wheat, Chicago funds that were shortening, the previous week reduced their net short positions by 3.7k to 59.3k, while in corn from 128k net long fell to 114k. The extension continues for soybeans, which reaches 123.5k net long positions.

Black Sea Grain Markets

• According to Rosstat, the wheat harvest in Russia this year is equal to 102.65 mmt, or 24% more than in 2021. The total volume of grain is estimated at 151 Mmt, and a year ago it was 30 Mmt less. Unlike Russia’s record wheat crop, corn and sunflower crops fell from a year earlier. 11.7 MMT corn was harvested, compared to 15.1 MMT a year ago and 15.3 MMT sunflower compared to 15.6 mmt.
• Against this background, according to Rusagrotrans, wheat exports from Russia for January 2023 may reach 3.6 MMT, which will be a record for this month after export duties were introduced in 2021. Currently, about 3.2 Mm of grain is agreed for export only through deep-sea ports.

Import/Export Statistics

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