• The markets have seen price boards closing in a sea of red as prices don’t just drop, they fall out of bed. Soybeans close near the session lows losing close to 4%, meal sheds 3.3%, corn over 2% and wheat just under 2%. European markets are closed for holidays which left London somewhat isolated but closing levels were lower although not to the same extent as seen in the US.

• Why the change, we hear you ask? Old crop soybeans have led the way lower with new crop beans, corn and wheat the followers. Funds would appear to have been sizeable net sellers and the corn and soybean charts, from a technical perspective, are looking somewhat more negaive.

• We have suggested in recent weeks that the markets are carrying additional risk premium on account of the Ukraine situation as well as the “planting delays” in corn. It could well be that the market is making some adjustment for this and today’s price action is reflecting this. One respected market commentator has placed the premium in Dec ’14 corn to be more than $1.00/bu and Nov ’14 soybeans at least $2.50/bu. The price realignment potential, should these numbers be correct is clearly significant and the impact of such a move should not be ignored.

• Interestingly, we would normally expect to see additional fund interest at the start of a new month, but on this occasion (and it is early days yet) we have seen the opposite with an outward fund flow to start May.

• US weekly export sales data was released as follows:

Wheat: 434,400 mt which is within estimates of 400,000-800,000 mt.
Corn: 951,800 mt which is within estimates of 650,000-1,175,000 mt.
Soybeans: 62,500 mt which is within estimates of 0-550,000 mt.
Soybean meal: 140,900 mt which is within estimates of 50,000-265,000 mt.
Soybean oil: 500 mt which is within estimates of 0-60,000 mt.

• Today has seen a further Brazilian soybean cargo added to the US lineup bringing this week’s total to six. Others are scheduled to be nominated in coming days and the total is expected to reach as many as 12 cargoes by the end of next week. This sort of volume will total around 25 million bu which will be added to the 20 million bu already imported as well as soybeans sourced from Canada. There is a strong suggestion that soybean imports into the US will reach a record 75 to 85 million bu as well as some 500,000-600,000 my of soybean meal.

• Finally we have just picked up on a report that Egypt’s GASC is tendering for early June shipment wheat, no doubt the timing is has been triggered by today’s price decline. Whether EU wheat gets a look in or not is debateable, our thoughts are that with unchanged specs it will be unlikely. Tender offers and the outcome will make interesting viewing.