Weekly Grain Digest - 15/02/2019

The COFCO UK Weekly Digest brings together a wealth of global grain intelligence to summarise this week's market drivers for grains and oilseeds.

Grain

Algeria Tender
Agressive Old Crop Sellers
US China Trade Talks
Market View:
Global grain markets have been on the back foot this past week with a complete lack of friendly news to help provide support. CBOT wheat has traded sharply lower with the March contract currently trading at 500 cents/BU which is the lows of the season.

This week’s Algeria tender did little to support markets as aggressive French sellers undercut other origins to ensure getting the business.  As a result, US HRW wheat was as much as $25/mt too high. The Russian Ag ministry is still standing on their export estimate of 37Mmt for the season (versus other forecasts at 36Mmt). Although Russian wheat is now uncompetitive, they still have plenty to ship to reach this number.

The US/China trade talk merry-go-round also continued this week with reports that despite ‘positive’ meetings, China remains a way short of agreeing to the US Intellectual property reforms. With more talks planned next week, everyone is hopeful for a successful outcome which could bring some positivity back to markets. However, with the next tranche of tariffs to be introduced in March there is little time to come to an agreement given the complexity of negotiations. 

The market outlook has turned rather bearish in the short term and despite the relatively large drop in values it doesn’t feel like there’s much buying interest both locally in the UK or on a global scale.