- It seems we were only recently talking of soybeans “flirting” with the $13/bu level, and here we are yesterday and today “flirting” with $14/bu, a price last seen in mid-September 2012 on the front month Mar ’14 contract. It was actually three weeks ago that the contract was re-testing $13/bu and we have driven higher almost without pause for breath since. It should be remembered that prices, and their movement, can be likened to movement within a high-rise building – the climb upwards is via the staircase, and the return to ground level is via the express elevator (lift), so caution should be exercised. Similar parallels can be drawn to soybean meal and our observation in that market would be the same as with soybeans.
- Closer to home, the MATIF wheat market has tested, and broken, the psychologically important €200 level, basis the Mar ’14 contract, although with CBOT wheat closing over 2.5% down today it is likely we will see lower numbers in tomorrow’s market.
- There has been a discussion that Egypt’s GASC will review the 13% moisture maximum that it imposed on its last tender, and if this is the case, and we see a further tender, this will potentially favour French sellers. At the same time we still have the “fun and games” in Ukraine with political posturing very much to the fore. The impact upon Ukraine’s FX reserves should not be underestimated, and their standing in international grain markets for the remainder of this season, and (more importantly) next season should be kept in mind.
- It has not been in the forefront of the news, but the oat market has rocketed in Chicago in recent days with a limit up move yesterday and continued strength today all predicated on Canadian shipping difficulties which have been well documented. The fact that supplies exist but logistical issues have prevented them reaching market is important because the moment a logistical solution is reached we will likely see a collapse in price (express elevator – see above). The potential synergistic effect on other grains should not be missed.