Arkady Zlochevsky, president of the Russian grain union confirmed today in Moscow that Russia stopped grains shipments to other countries including Egypt. Egypt is now facing delivery failures and Russia is at risk of losing its reputation among grain traders.
Because of low volumes today, liquidity was not good in the markets and futures contracts moved brutally. European markets closed up. The trade thinks that European origins will benefit from the Russian export halt. US markets however closed lower, especially in the wheat markets. Chicago, Kansas City and Minneapolis all closed with two-digit losses. US wheat is seen as too expensive and year end and holiday market forced some traders to square their books and take profit on their long positions. The price action with these light volumes was probably exaggerated. Friday trading session will tell us more about the direction the wheat market is taking.
Corn closed lower too, losses were probably limited by good ethanol production numbers. Data showed an increase in ethanol production to 992,000 barrels per day last week. There will be no export sales report tomorrow, the next report has been postponed by the USDA to Monday. The previous report showed good demand from Japan and Mexico, two large buyers of US corn.
Soybean futures closed lower today along with soybean meal and soyoil. The front month contract in Soybean has been trading in a range for the last two months. In December, this range was $0.765/bushel only. The market is clearly looking for a direction; market-moving news should come soon from South America. South American weather forecasts remains being favorable. The Mato Grosso state in Brazil continues to receive rain. Crop areas in Argentina are mostly dry.
AgsPlayers