- Whilst fresh news may have been thin on the ground today it has been very active in Chicago with markets rebounding to the upside. Soybeans are up as much as 30 cents, corn plus 15 and wheat 12, which means corn is the biggest gainer on a percentage basis. Interestingly, metals and energies are also trading higher. Given there is little, if anything fresh to trigger the move we turn to technical considerations, which have shown reversal patterns, particularly in soybeans and corn at the end of last week, and these seem to have been picked up – and followed – today.
- Wednesday’s acreage and yield estimates will be the next significant item to be picked over by the trade. Average trade estimates are a touch lower than the FC Stone and Informa figures released last week, and it appears that there is a general impression that downward revisions in new crop end stocks are on the cards.
- Reuters reported that forecasts for strong soybean meal demand from China and anticipation of a smaller US crop were the key drivers of todays hike in European price levels. S American meal prices rose some $5-10 in Europe and EU origin meal also gained a similar amount. The new forecast estimates that China will import a record 76 million mt of soybeans this year, an 8% increase on the 2014 season. July customs data from China showed July imports to have reached a monthly record of 9.5 million mt, 17.4% up on June. The news countered fears of a Chinese slowdown, which has in recent months fuelled a broad selloff in commodities.
- Staying in Europe, the French AgMin released its latest estimate of the soft wheat crop at a new record level, 39.3 million mt. The figure represents a month on month increase of 1.4 million mt. However, the corn crop was put at 13.2 million mt, down a staggering 28% year on year. The barley crop was also forecast 0.5 million mt higher at 12.2 million mt whilst rapeseed was seen 100,000 mt lower month on month at 5 million mt.
- Hot on the heels of the French AgMin was Stratégie Grains who updated their UK crop estimates. The early wheat harvest data showed yields to be slightly above the longer term average and they viewed weather forecasts as conducive to further harvest progress in coming days. Their UK crop estimate was raised 147,000 mt month on month to 15.295 million mt, the third largest in 11 years. Barley output was also seen at the third highest level in the same period with a crop of 6.884 million mt. Quality data was limited but they implied that initial specific weight were ranging from 65-69 kg/hl although the late July unsettled weather could lead to some of the later crop displaying poorer quality although this is not confirmed at this time.