- What markets take one day they give back another! Chicago wheat has led prices lower today as concerns over a Russian export duty fade. One Russian ag deputy countered talk from another (last week) in that Russia should cut wheat export duty in favour of new duties on barley and maize. Left hand, right hand and all that springs to mind! Basically it should not be forgotten that Russia has too much wheat/grain and needs to remain an exporter to the world’s market.
- China appears to remain uninterested in US soybeans and is in preparation for their Lunar New Year holiday which is notorious for commodity inactivity and market lull. With recent purchases from S America (4-7 cargoes of Brazilian soybeans and cover through to May) there appears little reason for them to chase the market higher. In addition it looks likely that the Brazilian farmer will dig deeper into soybean harvest in the next couple of weeks, and will likely increase sales if prices move higher leading to price caps.
- There is a continued absence of fresh input and with this as a backdrop we continue to focus upon lack of evidence of enlarged world or US grain export demand and the main fundamental factor, too much supply chasing after too little demand, as we head into spring. The US planting season, the weather and likely acres are the next items upon which we will have to focus. Globally, it seems that farmers are holding onto large stocks, either by design or by default, and this remains a potential price cap as we look forward.