- Overnight news saw US crop conditions reported with winter wheat rated as good/excellent dropping 2% to 63%, which is well above last year’s 34%. The fully planted crop was reported to be 89% emerged, again better than the five year average of 85%. Soybeans are 95% harvested and corn 91%, both figures at, or very close to, trade expectations.
- Across Europe bio-ethanol producers are “making hay” whilst the sun shines, or more properly, taking advantage of lower grain prices and the imposition earlier this year by the EU of anti-dumping duties on imports of US bioethanol to boost output and make good margins – for now. Their outlook for the future is less rosy as ethanol prices look set to decline into the winter period. One tangible sign that things have improved is the announcement by Ensus of their restart ing production (once again). Quite how the future for EU bioethanol will pan out will be interesting to monitor as production capacity turns on and off, and blended ethanols are imported in an effort to bypass duties. In addition Brazil’s exports to the US market may well look to the EU in the wake of last week’s EPA announcements.
- Egypt’s GASC has once again made a wheat tender for mid-December shipment with Russia securing the 120,000 mt award in what many are suggesting may be their last. This was their first sale since September. The successful sale prices was a touch higher than that of last week’s trades. There were no offers from either Ukraine or Romania, and French offers (for the specification) were some $6 to $10 higher than last week. Many assumed that France would be the origin of choice this time around, but clearly this was not the case.
- India’s recent sale of wheat would appear to have achieved better than their recently lowered floor price might have suggested with 340,000 mt sold at an average price reputed to be $284/mt. There is an expectation that another tender is to be announced before long.
- In S America Argentina’s AgMin have reported their soybean plantings to be 26% complete, 4% behind last year and Brazil is 2% ahead of last year at 69% complete. Reports that Brazilian farmers are considering switching their traditional safrinha, or second, crop away from corn to soybeans have been confirmed to us today. Clearly this would provide further soybean output and a reduction in corn production, but is not without problems, the most significant being potential for disease build-up as soybeans follow soybeans rather than the more traditional corn following soybeans.
- CBOT soybeans and meal closed lower tonight whilst the grains, corn and soybeans made gains to close higher. Soybean prices are approaching key support levels, which if breached will likely pave the way for further selling pressure particularly in the face of the current growing conditions in S America. The grains held in positive territory on near term cash buying which lent support but this, we continue to believe, will be short lived in the face of globally growing supplies.