- Chicago wheat has fallen below last week’s low in trade today whilst soybeans tested last week’s high. The fall in wheat has seen funds making additional sales and pressuring corn at the same time. Limited farmer selling and a firming cash basis has added to market turmoil but ultimately we are looking at neither bullish or bearish inputs when all said and done – for now.
- In an interesting development, much cooler ocean water has started to build across the western equatorial Pacific – and that cold water is starting to push eastward. The cold sub surface waters of the west look to start moderating El Niño conditions rather rapidly in coming months. This is something worth watching since a fast ending of El Niño would raise the weather/crop risks for S America and the US in 2016. We suspect that funds managers are watching the same El Niño/La Niña developments and could push out of short ag positions if the trend becomes clearer heading into year end. This is something that we will closely monitor in coming weeks. The ending of the current super El Niño seems more certain based on the rapid cooling of the W Pacific.
- The world grain trade has been listening to all of the promises being made by both Argentine presidential candidates. A speedy devaluation and ratcheting down of export taxes are openly discussed by both candidates. Based on the polls, traders expect that Macri will win the election and that speedy reforms will be enacted once he takes office on December 10th. Yet, many respected Argentine economists are advising not to listen to campaign promises! Promises aside, these economists argue that if Macri becomes president, he will likely take a more measured approach in moving to a Peso devaluation and an ending of grain export taxes. This would come as somewhat of a disappointment to the bears that now point to a wall of beans and grains coming to the world marketplace from Argentina.
- Last night’s weekly US crop condition and progress report showed US winter wheat good/excellent ratings were boosted 1% to 52%, vs. 60% last year. The biggest improvements are noted in; CA, IN, MO, OH and OR. Wheat planting has reached 94% complete, with emergence at 87%. Soybeans are reported to be fully harvested and corn is 96% gathered.
