World Grain - January 2023 - 16

GRAINMARKET REVIEW
COARSE
GRAINS
Economic woes, bearish
wheat drive market lower
by Chris Lyddon
Concerns over the world economy and its effect on demand,
and spillover from declines in wheat, pushed prices for maize
lower in December. Worries over potential problems with
shipments through the Black Sea are still in traders' minds,
while China's COVID problems remain a threat to demand.
The European Confederation of Maize Production (CEPM)
reported in its Corn Market publication of Dec. 14 that maize
for March 2023 delivery in Chicago had " lost some ground, "
in the week of Dec. 9.
" Non-commercial funds continue to reduce their net long
positions by adding short positions and closing long positions, "
CEPM said, explaining that forecasts of a record Australian
wheat crop added to the pressure on grain prices.
" Markets also continue to worry about the health situation
in China as the government announced further easing of its
anti-COVID policy, " CEPM added.
CEPM described December's World Agricultural Supply
and Demand Estimates report as " rather neutral for the market. "
It highlighted a 2-million-tonne reduction in the report's
forecast for US exports, bringing them down to 53 million,
" leading to a slight decrease in the pressure on American
stocks, " which the USDA projected at 32 million tonnes, a
2-million-tonne rise that CEPM described as " beyond operators'
expectations. "
Changes, compared to the same report a month earlier, at
the global level, include a 7-million-tonne cut in production to
1.162 billion tonnes, with consumption reduced by 5 million
tonnes to 1.17 billion and stocks down 2 million at 298 million
tonnes, changes that the southwest France-based organization
called " in line with operators' expectations. "
The most recent IGC Grain Market Report, published on
Nov 17, said the London-based international organization's
maize sub-index was down by 3% month-on-month, because
of a drop in US values.
" US maize futures dipped by 2% m/m, pressured mainly
by concerns about export demand and spillover from wheat, "
the IGC said.
" Owing to improving Mississippi River logistics, nearby
fob basis offers retreated sharply, with export prices falling
by $27 m/m, to $331 fob (Gulf), " the IGC said. " While con16
Monthly
corn price
(in US dollars)
100
150
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50
May
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Maize (US), No. 2, yellow, fob. US Gulf ports
cerns about poor competitiveness still featured, the premium
to equivalent offers in Brazil (Paranagua) halved over the past
month, now seen at around $33. "
The IGC's barley index was up by 5%, " largely due to an
advance in Argentina, " the IGC said, but noted that " amid
slack international demand, markets were mostly nominal. "
" Cash feed barley prices in the EU (France) eased on sluggish
export interest and spillover from wheat, " the IGC added.
" However, because of offsetting movements in currency
markets, US dollar-denominated fob quotations rose by $8,
to $307 (fob Rouen). With unfavorable weather adversely affecting
2022-23 production prospects, prices in Argentina advanced
by $45, to $365 fob (Up River). "
For sorghum, US Gulf export values fell marginally, to
$366 fob as losses in maize futures outweighed higher basis
levels, the IGC said. The agency added that " in Australia,
prices climbed by $25, to $320 (Brisbane) on tight supplies,
steady demand and currency movements, " while " at $291,
quotations in Argentina (Up River) were up by $6 on firmer
basis levels. "
The IGC also reported that " with movements mostly influenced
by neighboring markets and technical considerations,
US oats futures gained 6% month-on-month, and export quotations
in Canada firmed by $47, to $347 fob (Vancouver)
amid limited grower selling.
For rye, the IGC reported that " with exchange rate movements
compensating for a drop in local prices, dollar-denominated
milling rye values in the EU (Germany) were flat m/m,
at $282 fob. "
" Prices at inland terminals in Russia were also steady, quoted
at $155, " the IGC said.
Chris Lyddon is World Grain's European correspondent.
He may be contacted at: cajlyddon@gmail.com
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January 2023 / World Grain / World-Grain.com
Sep
Source: USDA; World Bank
http://www.World-Grain.com
World Grain - January 2023

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