WEEKLY WHEAT REPORT 16 APRIL 2019

Transcription

1 18/08/01 18/08/15 18/08/29 18/09/12 18/09/26 18/10/10 18/10/24 18/11/07 18/11/21 18/12/05 18/12/19 19/01/02 19/01/16 19/01/30 19/02/13 19/02/27 19/03/13 19/03/27 19/04/10 WEEKLY WHEAT REPORT 16 APRIL 2019 Unigrain (Pty) Ltd Tel. No. : Fax. No. : INTERNATIONAL MARKET Table 1: CME and KCBT wheat prices and weekly change (cents/bushel) Currently 09/04/2019 Weekly change Monthly change (c/bu) (c/bu) CME Jul ¼ ¾ -6 KCBT Jul US wheat prices ended slightly lower in the past week with July KCBT wheat prices leading the way lower. On a monthly basis US wheat prices also ended lower with July CME and KCBT wheat giving up 1.28% and 4.42% in the past month respectively. On the technical chart for July KCBT wheat we see that the market attempted to gain some ground but failed to hold above $4.40 and prices sold off in the session yesterday. The moving averages and indicators remain under some pressure but the market is oversold. Key support is around $4.30 and the previous lows seen at $4.28/bushel. US wheat prices traded lower in the past week with the US and global wheat stocks and the slow export progress out of the US limiting some of the buying interest. This week the forecaster SovEcon raised their 2019 Russian wheat crop estimate to 83.4 million tons which is up from their previous estimate seen at 80 million tons. The increased global supplies weighed on global wheat prices. US wheat market From the graph below we see that US KCBT wheat prices traded lower in the past week with July KCBT wheat giving up 0.63% in the past week. US wheat prices did come under some pressure despite the slightly weaker dollar with the dollar trading around to the euro currently which is 0.37% weaker week/week Figure 1: KCBT Jul wheat and dollar/euro Jul KCBT Dollar/Euro (RHS) USDA crop progress and conditions The USDA in their weekly crop conditions report indicated that 60% of the US winter wheat crop could be rated as good/excellent which is unchanged week/week. The current winter wheat crop conditions are well above the 31% rated as good/excellent the same time last year.

2 Figure 2: US winter wheat crop conditions (% rated as good/excellent) The USDA in their crop progress report indicated that 2% of the US spring wheat crop has been planted which was slightly lower than the market expectation seen at 4% complete. The current spring wheat planting progress is behind the 5-year average seen at 13% planted this tie of the year. Figure 3: US spring wheat planting progress (% planted) The weather map below presents the cumulative rainfall forecast for the week ahead. From the weather map we see that slightly drier conditions are forecast for the key US spring wheat areas in the week ahead. The slightly drier conditions could speed up the spring wheat planting in the week ahead. 2

3 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 Figure 4: Cumulative rainfall forecast week ahead USDA Supply and demand estimates The USDA released their supply and demand estimate last week. The US 2018/19 US wheat stocks was estimated at billion bushels which was higher than the market expectation seen at billion bushels and higher than the March estimate seen at billion bushels. Changes to the US wheat balance sheet included a cut of 10 million bushels in the US feed usage while exports were also lowered by 20 million bushels Figure 5: US wheat ending stocks and stocks to usage ratio Wheat ending stocks (mil bushels) Stock to usage ratio (RHS) The USDA in their report estimate the 2018/19 world wheat crop at million tons which is slightly lower than the March estimate seen at 733 million tons. The 2018/19 world wheat ending stocks was estimated at million tons which was higher than March estimate seen at million tons. 3

4 18/07/02 18/07/16 18/07/30 18/08/13 18/08/27 18/09/10 18/09/24 18/10/08 18/10/22 18/11/05 18/11/19 18/12/03 18/12/17 18/12/31 19/01/14 19/01/28 19/02/11 19/02/25 19/03/11 19/03/25 19/04/08 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/ Figure 6: World wheat ending stocks and stock to usage ratio Ending stocks (RHS) Stocks to usage (RHS) European wheat prices The graph below presents the May-19 European milling wheat prices. From the graph below we see that the market once again failed to break above the 190/ton resistance level and wheat prices pulled slightly lower after that. European wheat prices are 0.27% lower week/week Figure 7: May-19 European milling wheat prices (Euro/t) Local wheat market South African wheat prices ended higher in the past week with May and July wheat gaining 0.94% and 0.67% in the past week respectively. The rand is trading around R14.05/$ currently and is slightly stronger week/week. However it must be said that the rand posted some gains and traded as low as R13.89/$ late last week and the rand has since weakened again breaking above R14.00/$ once again. Resistance is seen in the R14.07 and R14.14/$. The new South African wheat import tariff of R675/ton which triggered on the 12 th of March is yet to be published in the government gazette. 4

5 18/07/23 18/08/06 18/08/20 18/09/03 18/09/17 18/10/01 18/10/15 18/10/29 18/11/12 18/11/26 18/12/10 18/12/24 19/01/07 19/01/21 19/02/04 19/02/18 19/03/04 19/03/18 19/04/01 19/04/ Figure 8: Safex wheat, rand and US wheat prices CME Jul KCBT Jul Rand/$ Safex May Safex Jul South African wheat prices posted some gains in the past week with July wheat ending 0.66% higher. The rand is currently trading around R14.05/$ which is slightly stronger week/week. However it must be said that the rand traded to an intraday low of R13.86/$ in the session on the 11 th of il but the rand has since come under some pressure once again Figure 9: Safex July wheat and Rand/$ Safex Jul wheat Rand/$ South African wheat imports The weekly South African wheat imports for the week ending the 5 th of il indicated that tons of wheat was imported in the past week. The wheat that was imported originated from Lithuania. This brings the cumulative wheat imports for the 2018/19 marketing season to date at tons. 5

6 Jun Aug Jun Aug Jun Aug Jun Aug Figure 10: South African monthly wheat imports (Tons) The table below presents the share of the South African wheat imports from the various origins in the current season to date as well as in the past few seasons. From the table below we see that almost 28% of the wheat imported in the 2018/19 season to date originated from Germany with the 2 nd most favored origin being Russian wheat which was 23.5% of total imports. Table 2: South African wheat imports from various countries (%) 14/15 15/16 16/17 17/18 18/19 US Australian Argentine German Ukraine Canadian Brazilian Poland Lithuania Uruguay Russia Romanian Finland Latvia Czech Rep Total (%) FOCUS FOR THE WEEK US wheat prices remain under pressure with the US and global wheat supplies and the slow export progress out of the US weighing on the market. European wheat prices were also under pressure in the past week. On the technical chart for July KCBT wheat we see that the moving averages and indicators remain under some pressure and as this report was written the market is looking to break below the key $4.30 support level. South African wheat prices managed some gains in the past week with the weaker rand adding some support. The rand once again broke above R14.00/$ earlier this week and is trading around R14.07/$ currently. See the technical graphs below: Safex July-19 wheat prices KCBT July-19 wheat prices 6

7 Daily WEAN9 Cndl, WEAN9, Trade Price 2019/04/16, , , , , , (+0.54%) SMA, WEAN9, Trade Price(Last), /04/16, SMA, WEAN9, Trade Price(Last), /04/16, SMA, WEAN9, Trade Price(Last), /04/16, /10/ /04/29 (JHB) Auto MACD, WEAN9, Trade Price(Last), 12, 26, 9, Exponential 2019/04/16, -1.27, 4.67 Value ZAR T ober 2018 November 2018 ember 2018 January 2019 ruary 2019 March 2019 il 2019 Price ZAR T Auto 7

8 Daily KWN9 Cndl, KWN9, Trade Price, 2019/04/16, 434, 434, 430, 430, -4, (-0.81%), SMA, KWN9, Trade Price(Last), 100, 2019/04/16, 492, SMA, KWN9, Trade Price(Last), 40, 2019/04/16, 448, SMA, KWN9, Trade Price(Last), 9, 2019/04/16, 437, SMA, KWN9, Trade Price(Last), 200, 2019/04/16, /03/ /05/08 (CHG) Price USc Bsh MACD, KWN9, Trade Price(Last), 12, 26, 9, Exponential, 2019/04/16, -7, -7 RSI, KWN9, Trade Price(Last), 14, Exponential, 2019/04/16, March 2018 il 2018 May 2018 June 2018 July 2018 August 2018 September 2018 ober 2018 November 2018 ember 2018 January 2019 ruary 2019 March 2019 il Auto Value -7 USc -7Bsh Value USc Bsh Auto 8