- Markets have today traded lower for most of the day on fund liquidation amid active volume and as prices fast approached support levels. A clear level to watch is $9.91/bu basis Mar ’15 soybeans, which just held today. Tomorrow is another day and it may well see another day of fund liquidation, in which case support levels may well be tested further.
- US ethanol stocks are growing, and quickly, reaching their highest level since Mar ’13. Ethanol production margins in the US will turn negative in coming weeks and we would strongly suspect corn grind volumes to reduce as a consequence. The industry will have to slow down as US blenders cut back their discretionary blend volumes and this will doubtless impact prices in time.
- Matif wheat fell a further €3 to 4 reaching a one month low and cash premiums remained unchanged leaving FOB values correspondingly lower. The weak €uro and a reduction in French end stocks as reported by AgriMer (reducing by 200,000 mt on account of increased 3rd country exports) was insufficient to provide price support. Russian intervention purchases remain pitiful, at a reported 108,000 mt, the Rouble fell to a one month low, and it is becoming clearer that aside from crop and S&D issues, currency is the biggest single uncertainty and influencing factor in coming months.
- The Rosario Grain Exchange reduced its forecast for 2014/15 soybean production by ½ million mt to 54.5 million mt whilst corn production was seen at 22.4 million mt, which is 900,000 mt above its last estimate. Wheat output was estimated 100,000 mt higher at 12.1 million mt.