- The week has started lower with some evidence of spread trades being unwound which has given support to the grains. Tomorrow’s FSA report and the attached concern that it may show significant acreage reduction, particularly in corn is also lending a degree of support. Weekend rainfall and more in the forecast, albeit probably too late to have a significant impact, has given the bears some comfort.
- Today has seen news that Indian monsoon conditions look set to support their soybean output and help to achieve the highest soybean meal exports in six years. India is the largest supplier in Asia, and looks to have the potential to reaching excess of 4 million mt in the year starting October. Whilst far removed from CBOT markets, this tonnage is sufficient to have some impact on futures prices in coming months. The export potential is also assisted by the weakening Rupee, which has lost 13% vs. US$ this year.
- We await tomorrow’s report and would not be surprised to see “fireworks” in immediate post publication trading.