- Looking at wheat first for a change, today has seen some excitement insofar as we have heard of a French vessel due to load 45,000 mt of wheat for the US at the end of the month. This backs up some of what we have been saying for some while, I.e. US wheat prices are simply too high! Or, turning that on its head, EU prices are too cheap, although we tend to believe in the former at this time given other world prices.
- US markets have closed in lower territory with soybeans and meal showing larger declines than the grains although corn did shed close to 1.5% on the day. Funds have been sellers, the trade seems to have picked up on the fact that peak US soybean exports is passing by and that record large US crush rates are likely to tip cash meal basis as evidenced by the switching of two further cargoes of soybeans to S America purely on price grounds as the southern hemisphere discounts grow ever more competitive. The US cannot afford to miss out on sales otherwise their end stocks will rise even further than already projected. It has been reported that eight cargoes have already been switched and two or three are being worked right now.
- There is a strong feeling in the market that the seasonal price top is now past, and that applies not only to soybeans and meal, but also in the grains as well. As mentioned previously the only real threat would come from adverse weather conditions in S America, and this looks unlikely with El Niño building and the correlation with near to trend or higher soybean yields in Brazil. We expect the recent lows (as opposed the season lows so far) to be tested before too long.