- US weather allowed markets to start the week lower, with soil moisture levels undoubtedly sufficient to assist development of newly planted soybeans and corn as well as aiding wheat crops. Wheat and corn turned higher later in the day finishing in positive territory. Soybean prices were pressured by improved weather and planting expectations. Old crop corn appears to be the pinch point with tight supplies keeping cash prices and premiums pressured, which has impacted the corresponding futures contract.
- In Europe MATIF wheat prices continued lower hitting 12 month lows as harvest starts in southern regions. It is still too early to draw conclusions from early harvest data on either yield or quality and the trade is watching both with interest.
- The UK harvest is still a long way off and with new crop barley trading at £17 to £20 below feed grade wheat, it is attracting a lot of interest from consumers. We have heard that there will likely be surplus feed grade wheat in northern France in the coming season, and this could well provide an interesting dynamic to feed grain markets in the weeks to come.That said, few users are rushing to buy into what can only be described as significantly cheaper new crop prices than have been seen in recent times.
- Old crop wheat prices are under significant pressure with consumers using corn and barley when and where available. The LIFFE old crop contract (Jul ’13) has retreated significantly in recent weeks to its current discount to new crop, something that was almost unthinkable three months ago.
- Clearly we have an interesting market with old crop dynamics playing out their dying weeks.
- We reported on S American soybean exports last week, vessel line-up in major ports continues to underline the strong demand which exceeds shipment volumes. Whilst May export volumes were record large we expect to see a continued strong pace through June as US supplies are too tight to meet importer’s needs. Soybean meal export volumes from S America are still insufficient to relieve the supply tightness experienced in many importing countries. Perhaps this has been the reason for US export levels to remain reasonably high leading to the high July CBOT contract price levels.