- It has been a lower day pretty much across the board today in Chicago markets, Paris too, with London wheat bucking the trend by moving higher in what we see as a currency driven move.
- The imposition of Chinese import duties on US DDG’s, improved rain prospects for both the Plains and N Brazil and a slowing export demand from China have all conspired to trigger long liquidation and selling in Chicago ahead of the USDA report tomorrow. Corn, wheat and soybeans are all lower with wheat falling below key technical support levels. The day’s tone has been bearish to say the least.
- Needed moisture is forecast for the US Plains where the dormant HRW crop will benefit and the limited stress it is enduring will ease. Market chatter is suggesting that EU wheat is being imported into the US on the current rally although we are unable to confirm this. Global wheat prices are starting to slide in the face of unsold Black Sea supplies and an aggressive export programme out of Ukraine. Once again we appear to be facing wheat supply pressure as export demand is being sought. Adverse weather is required in the Black Sea region if the US market is to break through technical price resistance.
- Our concern is that tomorrow’s USDA report will not push corn, wheat or soybeans out of their recent price ranges. As previously reported, the big unknown remains the fate of the Argentine soybean crop and whether flooding in the north or dryness in the south will significantly reduce their output in 2017.