US markets followed yesterday’s bounce this morning and have continued throughout the day lifting EU markets at the same time. Positive economic data from both China and the US have undoubtedly assisted; the prospects of a “hard landing” for the Chinese appear more remote as their GDP in Q3 hit 7.4% (massive by western measures!), and US housing data was at a four year high.

Global corn values have risen markedly as Brazil’s offerings in the export market look remarkably thin post-December. Ukraine’s offerings are becoming more expensive and it feels as if volumes are becoming somewhat restricted which could well point towards the more expensive US as a supplier in coming months. The key for importers going forward will be finding willing sellers – and this may become more difficult given the way we see global supplies.

Australian wheat has seen some price escalation on the back of potentially restricted availability in the dry conditions they are currently experiencing.

Strategie Grains figures for the EU grain crop are reduced mom by 1 million mt to 269.5 million mt, of which soft wheat account for 123 million mt, being a reduction of 700,000 mt. EU wheat export licences for the week amounted to 493,000 mt bringing then season total to 4.7 million mt.

We are picking up news of soybean planting delays in parts of Brazil which, if confirmed, will result in harvest delays and questions over the follow on “Safrinha” crops which characterise S American production. This key element of Brazilian production will need to be monitored closely as any change to normal patterns could well impact global supplies for a further season.

Today’s price action in the US and EU markets has raised our level of optimism although we need to see follow through into the weekend close if this outlook is to be confirmed. The lack of fund selling both yesterday and today is encouraging this outlook right now.