Wheat lower despite bullish announcement from Russia, Corn and Soybeans higher

Wheat lower despite bullish announcement from Russia, Corn and Soybeans higher


London, Dec. 22, 2014-Markets are unpredictable. For those who follow us on Twitter, you probably immediately remember this Tweet we posted after the Russian government announced it was preparing an export duty to restrict grains exports (wheat being the main focus of this new duty).


Indeed, our previous article was called "WHEAT LOWER AGAIN AFTER THE WEEKEND" (click here to read this article) and was ending by these words: "This week should be quieter unless..."
Unluckily, the market didn't stay low nor quiet for a long time.

Wheat bears and people claiming the wheat story was over got probably shocked by this new announcement. Wheat futures rallied and wheat was the main focus again. It didn't last long though. Traders realised the market went too far. They also remembered that US wheat is still expensive and that Russian supply can be replaced by other competitive origins. The two international wheat tenders this weekend showed that Egypt and Iraq bought respectively 240,000 tons of French wheat and 50,000 tons of Romanian wheat. These two factors explain why wheat finishes down for the second day despite bullish news from Russia.

Soybeans had the bigger gains among the Chicago cereals markets today after larger-than-expected weekly export inspections. Pakistan was a buyer of 50,000 tons of US beans. Higher soymeal futures gave support too. Trading volumes were not large and no noticeable news were to be reported. News from South America continue to be good for crops.

Corn finished slightly up. The corn market was supported today by good export news and by Chinese authorities approving formerly banned varities. The question is: will this approval bring a bullish support to the corn market ? China's Customs Department said corn imports were down 67.5% from a year ago and down 97.5% for the US origin. This drop of demand from China should worry the corn bulls.

The recap for the Weekly Export Sales is:
Corn 790,415 MT
Soybeans 2,234,262 MT
Wheat  442,055 MT.


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