Written Commentary
Grain calls are sharply lower. Black Friday. SF is near 12.66 and called down 8-15. SMZ is near 357.6. BOZ is near 60.94. CZ is near 5.79 and called down 6-12. WZ is near 8.36. KWZ is near 8.73. MWZ is near 10.36. Wheats are called down 5-15. US stocks are sharply lower. US Dollar is lower. Crude is sharply lower. New Covid variant in South Africa is triggering heavy selling in equities, energies and commodities. December grain options expire today.
EU moves to halt air travel from places with new COVID variant – Reuters
The European Union might halt air travel from places where a new coronavirus variant detected in South Africa had spread, the bloc’s executive said ahead of a meeting later on Friday of the 27 member states’ envoys to decide the matter.
Global authorities reacted with alarm on Friday to the new variant, with the EU and Britain among those tightening border controls as scientists sought to find out if the mutation was vaccine-resistant.
“The Commission will propose, in close coordination with Member States, to activate the emergency brake to stop air travel from the southern African region due to the variant of concern B.1.1.529,” said the executive’s head, Ursula von der Leyen.
A spokesman for the Brussels-based European Commission added that such a ban might be extended to other places where the variant has already been detected. These include Hong Kong and Israel.
“We need to act very fast, we need to be vigilant and we need to take all measures that are appropriate at this stage to prevent this virus from entering in Europe,” said the spokesman.
“It’s good that the member states are acting rapidly … We want to have fast and coordinated and consistent measures in place because we want to avoid that there are loopholes through which the variant finds its way to Europe.”
Britain banned flights from southern African countries after scientists said the new variant had a “very unusual constellation” of mutations, which were concerning because they could evade immune response and be more transmissible.
First identified this week, the new variant spooked financial markets and stocks as it is seen as a risk to global economic recovery from two years of the pandemic.
OPEC says U.S.-led SPR oil release may swell surplus next year
OPEC expects a release of oil stocks by majors consumers to significantly increase a global glut in the next few months, an OPEC source said, just over a week before a meeting to decide immediate output policy. The outlook might complicate decision-making for the Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, although several sources said there has been no discussion yet on pausing planned production increases.
Joint oil release set to have limited market impact, says head of PAJ
The volume of the U.S.-led coordinated oil release by consuming countries from national reserves is relatively small and is expected to have a limited impact on oil markets, the head of the Petroleum Association of Japan (PAJ) said on Thursday. “Since the volume is small, I think it is aimed at easing tightness in supply, rather than having a big impact on oil markets,” Tsutomu Sugimori, president of the PAJ told reporters.
China so far non-committal to Washington’s oil release, OPEC+ unmoved
China, the world’s largest crude importer, was non-committal about its intentions to release oil from its reserves as requested by the United States, while OPEC producers were not considering changing tactics in light of the U.S. action, according to three sources in the group. On Tuesday, U.S. President Joe Biden’s administration announced plans to release millions of barrels of oil from strategic reserves in coordination with other large consuming nations, including China, Japan and India, to try to cool prices.
EU raises 2021/22 wheat export forecast, cuts stocks
The European Commission on Thursday increased its forecast of European Union common wheat exports in 2021/22 to 32.0 million tonnes from 30.0 million projected last month. The upward revision reflected “the dynamics of the soft wheat market since the beginning of 2021/22 marketing year,” the Commission said in a presentation accompanying monthly supply and demand data for grain.
Argentina wheat crop forecast increased to 20.3 mln tonnes – exchange
Argentina’s 2021/22 wheat crop is expected at a record 20.3 million tonnes, the Buenos Aires Grains Exchange said in a report on Thursday, citing better than expected yields as the reason for increasing its previous 19.8 million tonne estimate. The previous wheat harvest record in grains powerhouse Argentina was 19 million tonnes in the 2018/19 season, according to exchange data.
Benchmark EU carbon price hits fresh record over 75 euros/T
The benchmark European carbon price hit a fresh record on Thursday afternoon, touching 75.04 euros a tonne. Prices were extending gains from Wednesday, having risen after Germany’s incoming coalition government said it would prevent carbon prices in its country from falling below 60 euros a tonne, traders said.
Ukraine grain exports rise 18% so far in 2021/22 to 24.8 mln T – Reuters News
Ukraine has exported almost 24.8 million tonnes of grain so far in the 2021/22 July-June season, up 18% from 21 million tonnes at the same stage a year earlier, agriculture ministry data showed on Friday. That included 14.3 million tonnes of wheat, 4.9 million tonnes of barley and 5.2 million tonnes of corn, the data showed. Ukraine plans to thresh a record 80.3 million tonnes of grain in 2021, up from 65 million tonnes in 2020. Exports could jump to 61.5 million tonnes from 44.7 million tonnes in 2020/21. The government has said that grain exports could include 24.5 million tonnes of wheat, 30.9 million tonnes of corn and 5.2 million tonnes of barley. Ukraine’s exports last season included 23.1 million tonnes of corn, 16.6 million tonnes of wheat and 4.2 million tonnes of barley.
VEGOILS-Palm oil clocks near 3% weekly loss as crude, Dalian prices weaken – Reuters News
Malaysian palm oil futures fell over 1% lower on Friday and logged a weekly slump, dragged by weak crude and rival Dalian prices.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed down 76 ringgit, or 1.54%, to 4,851 ringgit ($1,144.91) a tonne.
The contract has fallen 2.74% this week after two straight weekly gains, also hurt by a forecast for stronger production of top vegetable oils next year.
“Prices are juxtaposed between bearish technicals and friendly fundamentals,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Exports of Malaysian palm oil products for Nov. 1-25 rose between 4.5% and 10.9% from the same period in October, according to cargo surveyor data released on Thursday.The pace of growth, however, slowed from a monthly rise of between 9% and 18% seen during Nov. 1-20.
Exports in December are expected to be upbeat, although a lack of selling in the physical market indicates weak production, Paramalingam said.
Oil prices recorded their steepest daily fall since July as a new COVID-19 variant spooked investors and added to concerns that a supply surplus could swell in the first quarter, making palm a less attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract fell 0.8%, while its palm oil contract slipped 2%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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