• Today’s preliminary quiet session was overshadowed by news that a Malaysian airliner had been shot down by Ukrainian militants en route from Amsterdam to Kuala Lumpur with the loss of 280 passengers and 15 crew, The news raised concern that the conflict has escalated to a more international stage and traders scrambled to cover short positions, particularly in wheat and markets in both the US and Europe rose markedly. The major fear is that potential exports (despite the fact that sales are currently minimal) will be compromised and put pressure on other export origins. As of the time of writing there has been no confirmation of the facts, nonetheless nervousness remains in the market – rightly so.

• Prior to this news we were digesting last night’s Stratégie Grains update which revealed a further upgrade to EU soft wheat output as well as a cautionary note over quality. The current outlook is now for 140.5 million mt, a 1 million mt increase on June’s estimate, and around 4% over last year’s output. Barley output was also increased by 700,000 mt to 56.2 million mt which is some 6% below last year’s output. Corn output was also increased month on month from 65.9 million mt to 66.4 million mt.

• US weekly export sales data was released as follows:

Wheat; 320.700 mt which is below estimates of 400,000–550,000 mt.
Corn; 1,068,600 mt which is above estimates of 600,000-800,000 mt.
Soybeans; 598,600 mt which is within estimates of 450,000-775,000 mt.
Soybean meal; 173,300 mt which is within estimates of 45,000-240,000 mt.
Soybean Oil; 8,400 mt which is within estimates of 0-30,000 mt.

• Brussels granted wheat export certificates amounting to 175,208 mt, which brings the season total to 570,242 mt. This is 72,589 mt behind this time last season.

• Clearly we need to see how the Ukrainian situation plays out in the next day or so. Despite the tragic incident we do not believe that the flows out of the Black Sea are fundamentally changed, we do not see US, EU or Russian troops intervening to either escalate or quell the civil strife which is currently in play. We fervently hope that this is not the “Black Swan” event that we have been discussing in recent weeks.