• We have seen something of a weak and unconvincing “turnaround Tuesday” amid further short covering as prices approach the close in negative territory. Soybean meal looks to be technically weak as chart support has given way and lower levels look likely from a purely technical perspective. Winter wheat conditions are reported to be the best in years across Black Sea and much of E Europe. Outside markets have weighed on ags today with the DOW lower at midday, crude oil off $1/barrel with gasoline following (and again below the price of ethanol) and it is expected that US ethanol and crude stocks, due to be reported tomorrow, will remain at or near record high volumes.

• Markets remain in limbo awaiting new and fresh news. The next major input will come from stocks and seedings data from NASS at the end of the month, meanwhile it remains difficult to argue major price moves in the short term. An early to normal planting season in the US looks likely right now, removing one risk area, and the longer range (June/July) forecasts suggest excessive heat in central US is unlikely, again taking threats away from current price uplift. S America’s dominance of exports in the near term suggests to us that fund inspired rallies will be limited and offer opportunities to sell rather than be chased by buyers. N hemisphere weather remains the only likely issue to sustain price rallies – if it turns adverse.

• Stratégie Grains have reported French conditions as beneficial for winter cereal production and spring plantings. The mild winter conditions and lack of damaging frosts have left crops and prospects in a promising position.

• March 1st US wheat stocks report can be downloaded by clicking on the link below:

March 1st 2016 US wheat stocks

• A lot has happened in the last two weeks although nothing that has left us with a dramatically changed perspective on longer term price perspective. We have seen the funds continue their net short positions, indeed growing corn, wheat and soybean positions to record short levels once again as well as giving us one week where the growth in net short reached a record itself. As we know there is an inherent danger in such sizeable positions, discussed here many times, and the risk from any heavy short covering exercise has the potential to move prices significantly as well as causing financial pain to those with exposure. The market today has witnessed such short covering and prices have continued their recent upward momentum, though it should be noted that there has been little, if anything, in the way of fresh fundamental news. Our take therefore is that we are looking at a new “price top” forming in coming days as fund covering reaches its conclusion for now. It has been interesting to note US farmers selling corn on this latest upturn on price, and it is likely this which has limited price upside, cash basis levels have declined. This was the situation last week in the soybean market as funds exited some of their shorts. Dryness appears to be continuing in the US W Plains and this too has encouraged fund short covering.

• The Egyptian Government finally allowed a devaluation of their pound vs the US$ with a 13% weekend devaluation, and they promised to allow the pound to trade more freely which should help reduce the country’s dramatic shortage of dollars. However, the devaluation does make imported world commodities more expensive, including wheat. Many argue that this is just a first step by Egypt on its currency and an even weaker pound relative to the USD is likely in coming months.

• Huge peaceful protests occurred Sunday across Brazil against President Dilma. The protests placed fresh political pressure for her impeachment although it is unknown when, or if, such an impeachment process will start or how long it will take? However, a trucker’s strike never really gathered any momentum and the movement of interior soybeans to port has not been interrupted. Brazil is loading record tonnages of soybeans and waiting times to berth are starting to decline which should start to pressure their fob basis offers.