- The US soybean weather outlook for July remains favourable and the bears are looking for a final bounce into the USDA report to allow what may well become the final big selling opportunity of the season although there is a suggestion that there could be an acreage re-survey by NASS on account of June rainfall which is adding to current uncertainty in the market.
- In corn markets an improving US weather forecast (drier) and corn exports within expectations this week are the key elements to the market ahead of the USDA report next Tuesday. It feels that there are fewer concerns over a bullish surprise in the report than is the case for soybeans.
- As far as wheat is concerned there are insufficient weather issues around to materially impact the cash market, particularly in the face of limited demand, and it is difficult to see the US futures market holding current levels given the prospect of end stocks pushing close to 1 billion bu.
- Chinese soybean crush margins have fallen to their lowest levels in a year with meal prices just off 8 year lows. Reduced Chinese pig numbers and an unprofitable broiler industry have curtailed domestic soybean meal use. What is different from 2014 is that new crop Chinese crush margins are also negative – which along with cheaper Latin American offers is slowing US new crop soybean sales to China. And Chinese crushers are opting for cheaper Argentine soybeans through October. US 2015/16 soybean exports appear likely to fall below that of 2014/15 in our opinion.
