- There has been evidence of some active short covering in Chicago markets today which has seen prices higher on something of a bounce, which the technical trade may well view as corrective, relieving something of the oversold situation. At the same time we have seen energies tick lower and some value buyers picking bargains in equities that have seen some gains. However, it is probably fair to say that there is a lack of fundamental justification for higher ag commodities at this time and farmer selling as prices rise seem to back this up. We doubt the sustainability of the current rally.
- It is noted that vessels are arriving in Brazil, as much as 3-6 weeks early for new crop loading, with suggestions that there is little work for them elsewhere. Panamax rates are now below $2,500/day and no-one wants to get to the back of the queue when there are charters available.
- NOPA crush data was deemed bearish with January soybean crush at 150.45 million bu vs. 157.7 million bu in December and 162.7 million last year. This is the lowest figure since 2011 and the big surprise was that soybean oil stock surged to 1,526 million lbs, up 298 million from last year and 45 million up on December’s figure. It would seem reasonable to assume USDA estimated crush figures remain on the high side and that US soybean end stocks could potentially grow still further pressuring price gains.
- It was reported that Egypt rejected 8,000 mt of Canadian wheat on ergot contamination issues. This is clearly remaining an issue and warrants observation going forward.