- The CBOT soybean market continues to be pressured by the pace of harvest in Brazil, grains in the form of wheat and corn are in positive territory as some short position holders are taking cover and wheat feeding levels are reportedly on the increase.
- Additional pressure on wheat is seen from a prospective strong government buyer in Russia to replenish stocks released to ease rising domestic price levels this season. This has the potential to limit or cap to some degree the traditionally strong early season export volumes which are associated with Russia and also the Ukraine.
- Strategie Grains reduced their outlook for EU soft wheat output by 600,000 mt with a revised estimate at 131.6 million mt largely as a result of the poor UK crop prospects. The UK’s 2013 harvest is predicted at 12.108 million mt, down from 12.417 million mt a month ago. On the other hand barley output for the UK is estimated at 1.1 million mt higher, largely as a result of increased spring plantings following the wet autumn planting season which saw large acreages unplanted. An estimated 25% of the planned acreage was left unplanted by rains which approached record levels. Ongoing cold conditions have left the crop in a delayed state with the possibility that harvest may similarly delayed. We are seeing early indications of new crop barley discounts making an appearance at what seem to be attractive levels in comparison to wheat.
- Brussels granted a further 564,000 mt of wheat export licences, which brings the season to date total up to 15.779 million mt. This is 3.854 million mt ahead of last season at the same time; or in percentage terms this is 32.3% ahead of last season. We continue to have concerns over the end of season stocks levels, and if we have any harvest delay, the tightness will be exacerbated with potentially serious consequences.
- US export figures showed a strong week for wheat, corn and soybeans all of which were above estimates, soybean meal was below the lower end of estimate whilst oil exports were within estimated volumes. Wheat figures were in excess of 1 million mt which has added support to the market today.