- As we approach the close this evening CBOT markets are nearly all trading lower in true “turnaround Tuesday’ style.The holiday shortened week already appears to be taking its toll as volumes appear to be less than normal.
- News that China has cancelled some 300,000 mt of US soybean sales has had a negative effect on the market despite additional new sales being reported. It was not long ago that we hinted at the possibility of cancellations as the “Armada” of soybean vessels approached Chinese ports. Added to almost ideal S American growing conditions, assuming the plague of caterpillars is dealt with, there seems more to encourage the bears than the bulls right now.
- Front month (Dec ’13) soybean meal has jumped up sharply as short covering has been a feature and the first notice day on the contract fast approaches. Once the exodus of shorts is done we would expect some “normality” to surface and price trends to move closer to our view, which is lower for those who may have forgotten!
- US crop conditions, in their last report until April next year, showed winter wheat rated as good/excellent 1% lower at 62% much as expected and was 93% emerged above the five year average of 89%. Corn was reported to be 95% harvested, which is above the 91% five year average.
- Key to price action moving forward is what level will Chinese demand for soybeans be, and when will it switch to S America. Next on the agenda will be can S American logistics cope with the demand – and this will be key particularly in the aftermath of last season’s vessel line up which extended to many, many weeks.