- Chicago market volumes have been light as traders look forward to New Year and soybean futures have been liquidated in advance of first notice day Friday. Corn sagged with soybeans but wheat futures have firmed. Reduced volume markets leave themselves open to back and forth price action, which is something we have been seeing today.
- Chicago will trade normally (hours that is) on Friday and will close until Monday evening. January is the most critical month for weather and soybean yield impact in Brazil. Doubtless the markets will remember this week’s big $0.26 price surge and unless we see a change in the weather outlook and dryness in N Brazil, additional weather premium will feature strongly. Forecasts for S America hold some concerns into late January, and the trade will hang on to this feature until such time as it can truly be discounted.
- Egypt tendered again for wheat, and most offers were from Russia with no Argentine or US offers on the table. GASC secured a total of 235,000 mt with Russia picking up 175,000, the 60,000 mt balance from Ukraine. The average reported price was $197.42/mt basis C&F for early February shipment.
- S American weather is (as we have previously suggested) becoming a key driver of market direction and forecasts are little changed today. NE Brazil is forecast to see little or limited rain in the coming two weeks whilst NC Brazil chances range from 30 to 60%. This is, or should be, the wettest time of the year and with temperatures rising the risk of crop stress will be rising and potentially rapidly so. There is little, if any, evidence that dryness across La Pampa and S Argentina will end soon and it has to be stated that this is not a typical S American January weather pattern. Recall that January is key for soybean yields as stated earlier.