- We have see another day of gains in London & Paris wheat markets, May ’13 gaining £4.40/mt and €8.50/mt respectively. Clearly there has been some “following” of US markets, but technical resistance levels in Paris (€240.00 basis May ’13) have been broken, encouraging higher levels. Cash bids (and premiums) have remained strong and as the prospect of an early harvest recedes in the face of ongoing cold and wet conditions, current record low forecast stocks will be further pressured by an extended season. Both France and Germany are seeing strong domestic demand and export interest adding additional pressures.
- In the US early interest was evident in both soybean and wheat markets as buyers sought early value; cash bids for corn continued to rise and traders started to exhibit signs of concern over the potential for bullish numbers in the end March stock report, which is due to be released on 28 March.
- Reuters commodity forecasting arm, Lanworth, has released its latest estimates, the highlights including an anticipated record US soybean area at 81.3 million acres with 3.455 billion bu output, a slight reduction from their last estimate. Corn was forecast at 96.5 million acres with output pegged at 13.64 billion bu, also a slight reduction on last forecasts. The report stated that flat profitability in corn as well as changed crop rotation and a return to “normal” spring weather were key reasons for the increase in soybean acres. We have picked up elsewhere that as a result of last year’s “corn on corn” yielding disappointingly and fears of continued dry conditions may well be additional reasons for growers to favour soybeans over corn this coming season.
- In the same report, Lanworth increased its forecast of Argentine corn production to 25.5 million mt, a 600,000 mt increase, and also increased its outlook for soybean output to 50.5 million mt, an increase of 1.1 million mt. Brazil’s soybean output was forecast at 81.1 million mt, a modest 300,000 mt increase, whereas corn output was cut 0.5 million mt to 76.4 million mt.
- Finally, Reuters news reports that India is engaged in discussion with Egypt over the potential to supply wheat. India has large residual stocks following a series of good crops with output exceeding domestic demand. This has left India in need of additional sales in order to make space for the forthcoming harvest next month, which is expected to be in excess of 92 million mt; domestic demand is estimated at about 76 million mt, which by our calculation is a surplus of 16 million mt.