- Despite the Bank Holiday in the UK today markets in Europe and the US have continued without us! Fear of further hot weather and associated dry conditions has pushed the soybean complex and grains substantially higher as funds rushed to cover their short positions or add to their longs. As funds bought it was apparent that commercial sellers were there to take advantage of higher levels, which may well have limited gains. Brazil has seen aggressive selling on the rally, which when coupled with their revalued currency leaves growers with prices at, or very close to, record highs. Argentine sellers, who have been absent in recent weeks, were also notable in today’s trade.
- Weather, which is the driver, is forecast with high temperatures and only a few showers, adding to crop stress although forecasters are predicting a return to more normal conditions after this week. Rains are forecast, although not heavy they will likely cap this rally and we may well see the highs in place, potentially a “top” to sell into.
- We look for tomorrows London wheat market to open substantially (£5.00/mt) higher to reflect CBOT and Paris levels.