- The market has had something of a “Turnaround Wednesday”, 24 hours after initial expectation with wheat, corn, soybeans and soybean oil all posting some gains at close of business in Chicago, the market bucking this trend was soybean meal which closed a touch easier.
- It seems the market is taking a breather in its decline, which is constructive and (in the normal course of events) will permit lower levels without an escalation in the oversold status which has been a feature in recent weeks.
- Talk of additional US wheat export sales out of the Great Lakes has led to some support but fresh news is scarce right now. There is a fairly wide expectation that soybean export sale numbers, due for release tomorrow, will be “huge”, including the Chinese frame contract signed last week. In our opinion, this is not a significant piece of fresh news and any rally based upon this information should be sold.
- Matif wheat managed its first higher close in ten sessions and only the third in three weeks. The AgMin in Ukraine cut its all grain output estimate by 5% to 60 million mt (with no product split) with little in the way of additional information or explanation. Overall, the Black Sea is losing out on export demand yet buying in the interior is reported to be tough despite the weaker currency. Consumer interest in expensive Russian wheat at current prices is non-existent, and unless more northern regions run out of quality wheat early next year (which should not be discounted) Black Sea prices can not hold current price levels for long.
- EU corn SnDs, based upon increased early yield data, suggest that imports are likely to drop even more significantly that previously thought. The likely import volume could drop as low as 2 million mt, compared with 16 million mt last year and the USDA’s latest estimated figure of 10 million mt, which we strongly suggest to be way over the top.