• CBOT markets have seen something of a bounce following yesterday’s decline post USDA data release. Fund buying was, once again, in evidence with corn (Mar ’15) regaining the $4.00/bu mark although closing below that level. Corn’s gains have pulled soybeans higher and wheat followed dutifully.

• Egypt’s GASC made another purchase, again January shipment, and we can only describe the outcome as a surprise. Offers on paper yesterday were around the $259 FOB level, yet GASC secured 60,000mt of French at $247.24 FOB and 120,000 mt of Russian at an average of $$250.70 FOB – this is about a $10 drop in a day! What should we conclude? There were cargoes in place which needed to be moved; January may be the last month of shipment; there is more good wheat in Russia than previously thought. Any one of these could be correct, as could any combination. Interestingly there was an offer from the US at $277 FOB plus $31 freight, why bother? Maybe this was just to show how uncompetitive US wheat truly is right now! Maybe CBOT markets should take heed, listen and adjust accordingly. MATIF wheat traded as much as €3 lower, but finished the day pretty much unchanged, and FOB buyers withdrew from the market en masse.

• EU wheat export pace slowed a touch this week with 377,640 mt of export certificates granted. This keeps the season total ahead of last season but by 709,060 mt (5.38%) rather than the one million mt plus we have been used to in recent weeks. Corn imports for the week reached 102,000 mt bringing the Oct-Sep season total to 984,000 mt vs. 2.541 million mt last year.

• US weekly export data was released as follows:

Wheat; 526,500 mt which is above estimates of 250,000-450,000 mt.
Corn; 962,800 mt which is within estimates of 800,000-1,000,000 mt.
Soybeans; 810,300 mt which is within estimates of 700,000-1,000,000 mt.
Soybean meal; 88,600 mt which is within estimates of 50,000-200,000 mt.
Soybean oil; 14,700 mt which is below estimates of 15,000-30,000 mt.

• There is talk today that China will allow DDG’s from the US to be imported, via some channels, and this has supported corn somewhat. The suggestion that this is “payback” for losses on cargoes last year holds water although there is no official sanction on the deal. In addition, it should also be noted that volume is expected to be very limited simply because China has too much of its own corn to even consider volume imports.

• We should also be mindful that news of the upcoming Chinese delegation to the US should be taken with a pinch of salt. The signing of the usual frame contracts for soybeans and the like (with no performance bonds or penalties for failure to perform) is simply part of the annual seasonal pantomime – and we will doubtless hear of substantial soybean “deals” on the table. Caution on this point is the watchword..