- An interesting day with CBOT markets following yesterday’s upside price moves this morning before soybeans and soybean meal began to unwind some of the gains and push lower. Corn and wheat declined to follow the soy complex lower and continued higher into the close.
- Strong producer selling in S America as well as the US has been noted and has undoubtedly capped, and probably reversed, some of yesterday’s gains. S American weather contains rains of significance for north Argentina and Brazil in coming days and will be welcomed, particularly by the bears who have been wrong footed recently by reports of hot and dry conditions. Rain brings with it mixed feelings; harvest and ship loading delays offset by crop benefits. However, the consensus appears to favour a neutral stance with the weather neither harmful or overly beneficial. As a minimum, the forecast rain is likely to stem further losses from hot and dry conditions. It is clear that the Brazilian soybean harvest is progressing swiftly and export vessel loading is also ramping up in volume.
- To counter some of the reduced Brazilian soybean output forecasts which have been released recently, ABIOVE (Brazilian Association of Vegetable Oil Industries) has increased its estimate from 87.6 million mt last month to 88.6 million mt today.
- In Canada the AgMin has forecast the 2014/15 planted wheat area to decline 6% to 24.7 million acres with output at 29.3 million mt, a reduction of 22% year on year. Stocks however, are forecast at 11.8 million mt, almost double the prior year’s level. Canola (rapeseed) area is forecast 8% higher at 21.6 million acres with output down 11% at 16 million mt and stocks 3.3 million mt, five times the previous year’s figure.
- Russia’s planned intervention wheat purchases have reached 610,000 mt, well below the anticipated multi million level previously suggested. Total stocks are reported to stand at around 1.8 million mt and we understand no further intervention tenders are to be held this season. There are suggestions that sufficient free stock exists in both Russia and Ukraine to meet any late season buying that may still emerge (Egypt is likely to require one, or maybe two, further tenders for March and/or April shipment). The recent rally in CBOT prices will likely eliminate the US as a competitive source for the time being effectively leaving EU and Black Sea origins to fight it out between themselves.