- Chicago markets have made gains today led by wheat as discussions over dry conditions in S and C Russia grow. Winter wheat planting is under way and will pick up pace in coming weeks, and despite knowledge that spring weather is more influential than planting weather, the market is watching conditions closely. Also remember that funds still have a sizeable net short in Chicago wheat, which makes the market vulnerable to short covering rallies.
- Outside markets have added support, crude has gained $1.40/barrel, gasoline has added $0.30/gallon today and equities have gained roughly 1% despite last week’s Fed pessimistic outlook for global growth.
- Today’s announcement of 240,000 mt of soybean sales for 2015/16 delivery to “unknown” has also bolstered some support. It is likely that the buyer is China given the current Chinese delegation tour of the US. We would expect to see further sales announcements during the course of the week.
- There is no news over changes to the Russian wheat export tariff or intervention prices, despite anticipation of imminent announcements.
- The Brazilian Real continues to struggle with rates slipping to 4.1:1 vs. US$. Soybean plantings continue in mild and dry weather this week in the aftermath of mid-September rains that bolstered soil moisture levels. Rains are forecast to return in the 8-15 day timeframe, normal for this time of year and conditions are viewed as generally favourable.