11 February 2013

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  • Comments will be brief tonight as I am out of the country, back tomorrow.
  • Markets eased, particularly the soybean complex on improved S American prospects following rain showers across the Argentine corn growing regions and also S Brazil’s recent improved rains. It should be noted that whilst there may be rains to help prevent further deterioration, the crop does not appear to be improving and concerns are by no means over at this time.
  • In the USA the hard red wheat crop is reported to be suffering to a significant degree on account of dry conditions. We hear reports of crops dying in some areas and there appears to be a serious need for immediate rainfall in quantity to prevent a disastrous HRW harvest.
  • Physical cash markets continue to display strong basis as consumers struggle to place cover at more usual, lower, levels. This would tend to support the theory that stocks are tight, news which the funds seem to remain unreceptive to receive at this time. In CBOT wheat the fund net short position is at its largest in nine months, which, given the Plains situation and global stock tightness, leaves us wondering why.