CBOT markets gave back some of yesterday’s gains in early trade but as the day progressed we saw prices, particularly in wheat and corn, edge back into “green”, or positive territory once again. The soybean complex however (at the time of writing) has continued to post slight losses on the day.

Oil World has today reported that soybean prices are too low and do not fully reflect the risk associated with S American output as weather related setbacks and a potential return of La Niña conditions are contemplated by observers. The statement by the respected analysts continued by referring to  “the unusually small world stocks available at the beginning of 2013.”

Conditions in S America, particularly dryness in Southern Brazil, have raised concern over output which is almost being considered a necessity to restore a more balanced equilibrium to the much reported tight global supply situation. Typically, La Niña conditions are less than favourable for S American soybean output as was seen last season.

Australian based Macquarie Bank have suggested that we are about to see a rebound in US wheat exports which have been “terrible” so far this season. The change in export fortunes is attributed to rainfall derived quality issues in S American supplies, limited available supplies from Russia and Ukraine as well as pressured EU supplies. The outcome of the next tender from Egypt, who have been absent from the market this month, may well add some credibility to their view if the US is awarded contracts. We will watch with interest.

Wheat prices in both London and Paris moved higher again today with London reaching new contract highs in both old and new crop positions. Prospects for new crop supply are, as previously mentioned, pressured due to the extreme wet weather and flooding being experienced in the UK, which has restricted autumn sown acreage to well below “normal” levels. One UK consumer, referring to new crop wheat today said, “it looks as if we have missed the boat!” Given the level to which new crop prices have risen and the prospects for crops around the world, he may well be correct.