- For much of the past seven months, US corn has been the cheapest feedgrain in the world. This has bumped up US corn export inspections by 76% over the prior year in what we have coined the “big crop” vs. “big demand” marketplace. The chart below is reflecting the rise in world feedgrain values with S American offers well above the US until April or May in Argentina. The point is that world feedgrain prices are now rising, and unlikely to relax in a big way until sizeable Argentine corn exports are offered. Corn appears rangebound for now.
- Simplistic market commentary tonight suggests that soybeans will require daily supportive news input to avoid long liquidation and lower prices; corn is extremely overbought and there are fears of increasingly slower trade; the wheat market’s technical action is turning bearish and US exports continue to slow down.
- Away from the US it is now clear that UK wheat is the most expensive in the world having six months ago been competitive to say the least. We are seeing a tighter balance sheet, which is in stark contrast to the globally well supplied market, coupled with an early season strong UK export picture. Last month we saw LIFFE wheat hit a £30 premium over Chicago, which has eased in the last week or so, but this was a three year high. London futures rarely trade at a premium to Paris although this has been the case in recent times, likely as a consequence of French quality this year. There remains room for UK wheat prices to make further gains in relation to other world levels.
