The threat of referendums, and the partial mobilisation of military reserves in Russia continued to raise concerns over a protracted conflict and the longevity of the export corridor.
The support spilled over into today, said the CRM Agri team, but they noted that the upward momentum has come to a pause with Chicago wheat finding a new level at US$9/Bu.
The bullish upward market move translated into strong initial gains for European and UK feed wheat futures early today, but gains have since been eroded. However, prices are still up from yesterday's close, they added.
Meanwhile, crude oil has come under pressure today, falling back below $90/bbl today as economic concerns weigh on consumption confidence, said the analysts.
And US ethanol production continues to be a cause for concern, with weekly production falling yet again, they reported.
Oilseeds market outlook
According to the CRM Agri’s weekly oilseeds report, rapeseed prices are moving lower due to supply-related pressure and weaker oil demand projections.
Over the past week, prices have dropped below the €600/t level. “We lowered our price forecasts and now project rapeseed prices to average €580/t (US$571/t) in Q4.”
Ukrainian exports of rapeseed have been encouraging, they added.
“July-to-date exports reached 1.29Mt. Exports picked up in pace from just 90.5Kt in July, to 624.4Kt in August and 577.2Kt so far in September—driven entirely by the reopening of the ports.
“Moreover, we expect further pressure on rapeseed markets as growing confidence in supply from Canada and Australia is expected ease supply tightness. Statistics Canada’s is projecting canola production to rise by 38.8% to 19.1Mt, as growing conditions in the Prairies improved considerably relative to 2021. Australian canola production is also seen rebounding in 2022/23.”
Economic headwinds persist
Demand for US soybeans will be key in terms of the direction of markets, with China the main importer. And the analysts see potential for reduced purchases from that country due to a deteriorating economic outlook.
Meanwhile, looking ahead to South America, all expectations are for a record-breaking Brazilian soybean crop, by some distance.
The team, thus, maintains a relatively bearish outlook on soybean prices.