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As 2023 came to a close, wheat markets were muted due to the holiday period, with little physical activity reported, while a flurry of tenders were either cancelled or passed on due to what buyers saw as unattractive offers.
Jordan’s state grain buyer is believed to have made no purchase in the international tender seeking to buy up to 120,000 metric tonne of milling wheat, which closed on 26th December, trade sources told Fastmarkets.
A new tender was expected to be issued to close on January 4, covering the same shipment period of between March 1-15, March 16-31, April 1-15, and April 16-30, 2004, depending on origin.
Trading houses believed to have participated in the tender were Al Dahra, Ameropa, Cargill, Cerealcom Dolj, CHS, MC Food, Solaris, and Viterra.
In Pakistan, no price offers were believed to have been submitted in a tender from the Trading Corporation of Pakistan (TCP) to purchase 110,000 tonne of wheat, which closed on 27th December.
The tender specifications were regarded as unappealing, with a bid bond required for 2% of the offer value and a performance bond of 5% of the contract value.
Egypt’s state grain importer also returned to the market looking for optional origin milling wheat for March shipment but ultimately skipped on purchasing despite receiving offers that were at the same level or even below the previous tender; trade sources told Fastmarkets.
The state-backed General Authority for Supply Commodities (GASC) received sixteen offers for the March 1-10 shipment of wheat, with the lowest for a 180-day letter of credit shown at $262.35 per tonne FOB Constanta and $267.35 per tonne FOB Constanta on a 270-day letter of credit basis.
This was for Ukrainian-origin wheat offered by the Ukraine-based company Nibulon.
Selling ideas for Romanian was indicated at $266.70 per tonne to $277.80 per tonne FOB for 180-day payment and $279 per tonne to $288 per tonne for the 270-day letter of credit.
The Bangladesh Directorate General of Food (DGF) was said to have purchased about 100,000 tonne of milling wheat in two international tenders, which closed on December 12 and December 19.
In the tender held on December 12, 50,000 tonne was reportedly bought at $317.56 per tonne CIF liner out from Cereal Crop Trading, which was the lowest offer and most likely wheat of Russian origin.
Another 50,000 tonne was bought at $315.29 per tonne CIF liner out from Agrocorp International, which was also the lowest offer reported in the tender on December 19.
Agrocorp’s wheat is expected to be sourced optionally from Argentina, Bulgaria, Germany, Lithuania, Romania, Russia, Uruguay, or Ukraine.
The wheat could be sourced from any worldwide origins except Israel and is sought for shipment to two ports, Chattogram and Mongla.
The French port of Rouen has reported that wheat exports were seen at 150,082 tonne in the week ending December 21-27, with the largest wheat volumes destined for China at 91,582 tonne, or 61% of the total weekly wheat exports.
These were followed by a 31,500 tonne cargo to Algeria and 27,000 tonne of wheat headed to Tunisia.
According to data from the European Commission, France exported 2.87 million tonne of wheat between July 1, 2023, and December 18, 2023.
Ukrainian wheat exports registered at 1 million tonne to go abroad during the two-week reporting period ending December 29, which compares with 290,000 tonne in the week to December 13.
Spain was the main importer of Ukrainian wheat during December with 585,940 tonne, the lion’s share of the volume, followed by Indonesia with 151,712 tonne, Pakistan with 122,942 tonne, and Italy with 105,247 tonne.
That pushed the total volume of wheat exported since July 1 up to 7.368 million tonne, around 12% down year on year.
Ahead of the New Year, the US market remained quiet following the Christmas Day holiday.
The week started with the news that key rail connections at Eagle Pass and El Paso, Texas, that link the United States with Mexico, had been reopened.
The National Corn Growers Association (NCGA) expressed relief over the rail crossing re-opening and emphasized the need to avoid similar situations in the future.
US corn inspected for export in the week ending December 21 landed at just over 1 million tonne, weekly data from the USDA revealed, coming in above analysts’ estimates and last year’s volumes.
However, inspections were active in both the interior and US Gulf regions though, with the Gulf accounting for around 62% of all inspections, and the interior market – usually dominated by rail exports heading to Mexico – making up another 21% of the total.
US weekly ethanol production moved higher by 36,000 barrels per day (b/d) to 1.107 million b/d in the week ending December 22, and ethanol stocks added 611,000 barrels to 23.52 million barrels, according to data published by the US Energy Information Administration (EIA).
Over the week, full production equated to the consumption of 2.85 million tonne of corn, up from the 2.76 million tonne reported at the end of December.
US weekly corn net sales for 2023/24 rose by 23% to 1,242,100 tonne in the week ending December 21, and exports moved higher by 47% to 1,279,500 tonne – a marketing-year high, data from the US Department of Agriculture (USDA) showed.
Total accumulated exports for the current marketing year are now at 11.71 million tonne, up 27% from 9.23 million tonne a year ago.
Looking ahead, the US’ top corn customer for the current year is projected to increase imports, with a Mexico-based agriculture industry group reporting that Mexico’s corn production dropped 40% in 2023.
As of the week ending December 21, US corn exports to Mexico for the current 2023/24 marketing year accounted for 48% of all exports with 5.62 million tonne sent across the border, according to Fastmarkets’ calculations.
In Argentina, rain brought relief to Argentinean crops in the week ending December 27, but hail could cause losses, the Buenos Aires Grains Exchange (Bage) weekly crop report showed late in December.
Corn sowing reached 69.9% of an estimated 7.1 million, an 11.3 percentage point advance on the week and 6.9 percentage points ahead on the year.
Farmer sales of the 2023/24 corn crop were up considerably, rising by 108% to 1.2 million tonne in the week ending December 20, while sales of the 2022/23 crop rose 48.4% to 815,000 tonne, data from the country’s agriculture secretariat showed Wednesday.
In Brazil, the country’s grain exporters’ association Anec cut its December corn export estimates to 6.9 million tonne from its previous 7.2 million tonne projection, below the 7.3 million tonne shipped last year, its weekly report showed late in December.
Brazil’s December corn exports in the first three weeks of the month amounted to 5.2 million tonne, compared with 6.2 million tonne exported in the last month of 2022, the country’s customs data showed.
Brazilian corn exports for December were forecast at 6.9 million tonne according to Anec’s latest report.
The Russian government has further raised the corn export tax for the January 11-16 period by RUB283.10 per tonne to RUB1431.70 per tonne, equivalent to $15.85 per tonne, according to the exchange rate, according to the update from the agriculture ministry.
Ukraine’s weekly volume of corn declared for export reached 2 million tonne in the last two weeks of the December, while the total corn volume exported since July 1 amounted to 9.35 million tonne, 25% lower year on year, as reported by the Ministry of Agrarian Policy of Ukraine, citing operational data from the State Customs Service.
In the last week of 2023, the soybean market focused on Brazil’s weather and its impact on the South American country’s crop.
According to Brazil’s National Institute of Meteorology Inmet, most of the Center-West, and especially Mato Grosso, were due to receive intense rain until December 31.
In January, however, the rain was projected to be lower than the average for the period in the state.
The water deficit will persist in the states of the Matopiba Region, Maranhão, Tocantins, Piauí e Bahia, which faced a lack of rain all through the sowing period for summer crops.
Harvest has kicked off in Brazil’s powerhouse Mato Grosso and producers report low yields due to the lack of rain during planting.
Brazil’s grain exporters’ association Anec and customs data point to record export volumes 2023 for soybean and soybean meal.
Anec pegged Brazil’s soybean exports at 101 million tonne in 2023, up 30% from 2022’s 77.8 million tonne shipments.
Soybean meal exports were expected to reach 22.3 million tonne by the end of 2023, a 9.6% year-on-year increase.
In Argentina, President Javier Milei sent to Congress a project granting him ample power by declaring a “public emergency in economic, financial, fiscal, social security, security, defense, tariff, energy, health, administrative and social matters until December 31, 2025.”
Among the measures sent to Congress is the increase in tax exports, known as “retenciones,” on soybean products to 33% from 31% and sunflower complex taxes to 15% from 7%.
All other agricultural products will be charged 15%, except for 18 products such as dairy and rice.
Argentina’s General Confederation of Workers (CGT) has announced a general strike for January 24 to protest against the measures sent to Congress.
In the destination market, activity was also muted with no fresh sales to China confirmed for the final week of 2023.
Offers for cargoes out of Brazil moved up mid-week (late December) before retreating again, while buy ideas were said to be limited.