- The start of the week saw some short covering, which prompted modest price gains and Wednesday has been no different with outside markets continuing to offer support if it were needed. Crude has seen a $2/barrel hike with the US$ marginally lower and equity indexes up as much as 2%.
- Argentina raised its biodiesel export tax to 3.9% from 1.6% as a revenue raising exercise as shipping to the US remains active, and the jump is not thought to be sufficient to alter current flows.
- Uncertainty remains over wheat output in India with latest estimates at 88-92 million mt being higher than expected but the trade anticipates lower production with a 75-95 million mt range. With global supplies at their current level this is not thought to be, or become, a significant issue at this time.
- Technical chart patterns have become somewhat more supportive than previously, and this may continue to lend a degree of strength to prices. As an example we are looking at May ’16 soybeans trading above key moving average price levels although we should not forget the potential pressure from the current and ongoing S American harvest which will continue to dominate the market for the next few months.
- In summary at the midweek point we see the bulls and the bears in a tussle for supremacy in a market that is frustrated by a clear lack of market moving input. Our considered view is that we will see more clarity as we reach March when US planting intentions, weather and S American yields will all be more evident.