• Today has been interesting with the soybean and wheat markets initially pushing higher before easing into the afternoon. Corn bucked the trend with prices easing from the outset. Yesterday’s wheat rally may well have proved too much and too fast allowing profit taking today, no doubt time will tell. The price reversal in soybeans may well be a result of further attempts by one large Chinese soybean purchaser attempting to sell up to six cargoes (360,000 mt), sourced from Brazil, to the US. China has already cancelled  up to 600,000 mt of S American soybean cargoes scheduled for shipment in the Mar/May position on account of negative crush margins. Additionally, Reuters report as many as 30 further cargoes from S America being renegotiated to allow a shipment delay of a month.

• Interestingly, the USDA has warned that China “may” have to pay premium prices to import corn in future due to their status as a “risky customer”. Rejection of cargoes due to the non-approved GM event, MIR 162, has left a sour taste in the mouths of sellers, and according to officials, “the Chinese are going to have to learn that their actions will have consequences.” Strong words indeed!

• News that US soybean exports for the week were 639,700 mt which is above estimates of minus 100,000 mt (on account of anticipated cancellations) to 300,000 mt added to underlying market price support. The remaining export figures were as follows:

Wheat; 597.00 mt which is above estimates of 250,000-500,000 mt.
Corn; 745,800 mt which is above estimates of 400,000-700,000 mt.
Soybean meal; 486,900 mt which is above estimates of 100,000-200,000 mt.
Soybean oil; which is within estimates of zero to 50,000 mt.

• On the subject of exports, the pace of EU wheat exports continued with Brussels granting weekly licences totalling 600,024 mt, which brings the season total up to 23.066 million mt. This is 6.874 million mt (42.5%) ahead of last year. To hit the USDA’s latest EU export total of 29 million mt, which was increased by 1.5 million mt on 10 March, weekly export licences will have to average just over 395,000 mt per week for the remaining 15 weeks of this season. Given concerns over Black Sea exports, with the Ukraine/Russian situation, it feels as if there could be greater opportunity for the EU as an exporter.

• Stratégie Grains’ latest update confirms that winter cereal development conditions remain good and spring plantings to be under way. Overall feed demand across the EU is revised upwards with a consequent upward revision in cereal consumption. Soft wheat output for 2014/15 is revised upwards by 200,000 mt month on month to 137.7 million mt, an increase from 2013/14’s 134.9 million mt. 2014/15 predicted exports were up 700,000 mt Monday at 22.4 million mt, which is down on 2013/14’s estimated 25.6 million mt. Barley output for 2014/14 is also revised higher month on month to 55.4 million mt, an increase of 400,000 mt, and compares with 2013/14’s figure of 59.7 million mt. EU corn output for 2014/15 is increased 100,000 mt month on month to 65.2 million mt, which is 800,000 mt higher that 2013/14’s 64.4 million mt.

• The Cereals Event in Geneva this week has heard that global corn production is set to hit record levels in 2014/15, which will increase stock levels. This appears to confirm the picture we have outlined, and one which the USDA’s latest numbers also suggest. Output for 2014/15 was predicted to hit 978.4 million mt, an increase from 967.5 million mt in 2013/14 according to the president of conference sponsor AgResource Co. He went on to predict a slowdown in red meat consumption and a 2014 peak in US biofuel consumption, which would result in reduced corn consumption and a consequent stock build.

• The Ukrainian ambassador to the UN has reported on indications that Russia may be preparing “military intervention” in east and south Ukraine. This was denied by a Russian diplomat, but regardless of statements and denials the level of concern over the region has certainly not reduced.