• The anticipated end to US QE3 has failed to materialise and the ensuing drop in the US$ led to a sharp short covering rally which has pushed equities, metals and energies higher along with ags. The dollar induced rally will be, we expect, short lived as the US harvest looms large and the US export market look uncompetitive in the global context.

• Early US harvest data is providing good news as yield data is exceeding expectations in both corn and soybeans. Whether this trend will continue as harvest moves north remains to be seen.

• The USDA has today released its weekly export figures as detailed below:

Wheat: 701,900 mt, which is above estimates of 500,000-650,000 mt.
Corn: 437,400 mt, which is below estimates of 450,000-650,000 mt.
Soybeans: 923,300 mt, which is above estimates of 650,000-750,000 mt.
Soybean Meal: 46,600 mt, which is below estimates of 100,000-230,000 mt.
Soybean Oil: 20,600 mt, which is above estimates of 5,000-15,000 mt.

• Stratégie Grains today reduced their estimate for UK bioethanol output based upon the slow startup of the Hull based Vivergo plant. Consequently, their estimate for domestic wheat consumption in bioethanol production is similarly reduced (by 75,000 mt) to 870,000 mt in the 2013/14 season.

• Brussels granted wheat export licences totalling 589,335 mt bringing the season total to close to 6 million mt. This is 2.7 million mt ahead of last year’s total (82.9%).

• Late news saw Reuters reporting a cut in Argentina’s 2013/14 wheat acreage to 3.4 million ha, from 3.9 million ha previously, as a result of dry conditions. Corn acreage was also anticipated to be reduced, by nearly 7% year on year, at 5.7 million ha.

• CBOT closing prices saw soybeans and meal lower and the grains closing higher, unwinding of spread trades would seem the likely cause.