- A continuation of non-threatening US summer row crop weather is adding to the weaker tone in Chicago markets as is fund selling. Corn is following soybeans and wheat is holding its own as EU crop estimates continue to inspire and weather that is failing to assist harvests in Germany and Poland. The fund short holding in wheat is raising concern levels, in other words if they decide to cover we could see prices spike sharply higher. This would potentially coincide with the end of the US harvest at which time prices tend to turn seasonally higher – watch this space closely would be our thought!
- Recall our previous comments regarding “big crop, big demand”, buying price breaks or selling rallies in wheat may not provide good returns as there is likely to be a better day round the corner! Currently fund length in soybeans (given non-threatening weather) and their short position in wheat are what the market is all about today.
- There are suggestions around the market today that China is about to enact a US DDG embargo on imports later this week quoting dumping activity under WTO rules. With a 9-30% duty this would make a serious impact upon US DDG export potential, and is unlikely to have little, if anything, to do with cheap global wheat prices – or is that just taking a cynical stance once again!
- We continue to believe that US corn and soybean prices are searching for, and potentially close to, a seasonal bottom.