• CBOT markets are all higher with just over half an hour of trading left today in what is becoming a daily seesaw in price action. Clearly, despite Brazilian roadblocks being largely cleared, the market still feels some risk premium is warranted although we continue to believe that this will erode in coming days and weeks.

• The International Grains Council (IGC) has today forecast smaller global corn and wheat crops in 2015/16. They see a 5% decline in corn production and a smaller 2% decline in wheat output. Corn output at 938 million mt is down from current the year’s crop of 992 million mt, but will still be the third largest on record. Large opening stocks will largely mitigate any availability issues, with the IGC stating, “strong demand is anticipated, especially for feed, corn ending stocks are likely to remain comfortable.”

• The current year’s wheat crop was increased by 2 million mt to 719 million mt partly due to an upward revision in Argentina’s crop to 13.9 million mt from 12.5 million mt previously forecast. They said,” prospects for the 2015/16 world wheat harvest remain mostly favourable and only a small year on year decline in production is anticipated”. The 2015/16 crop is estimated to reach 705 million mt.

• The USDA has today released its weekly export figures as detailed below:

Wheat: 459,000 mt, which is above estimates of 200,000-400,000 mt.
Corn: 864,000 mt, which is below estimates of 900,000-1,100,000 mt.
Soybeans: 495,400 mt, which is within estimates of 450,000-650,000 mt.
Soybean Meal: 85,000 mt, which is below estimates of 100,000-300,000 mt.
Soybean Oil: 14,200 mt which is within estimates of zero-20,000 mt.

• Brussels issued weekly wheat export certificates totalling 965,254 mt, which brings the season total to 22,059,209 mt. This is 772,827 mt (3.6%) ahead of last year’s record pace.

• Focus continues to stay on Brazil and logistic issues, and it is noted that there are limited disruptions to grain and oilseed flows so far, and it should be remembered that Brazilian commitments have risen substantially over the last week. We are informed that the crop in Rio Grande do Sul may well reach upwards of 16 million mt, which will be a record by some way. Estimates for the total Brazilian crop remain buoyant and a final output in the range of 94-97 million mt would not surprise us.

• US$ strength and €uro weakness continue to feature in international markets. The former has traded through last week’s high and is flirting with multi-year highs posted earlier in the month. This continues to leave US grains and oilseeds in a difficult position when it comes to competing in international markets. EU wheat continues to search for world demand assisted by the pressured currency.