CBOT markets showed an inclination to trade higher this morning until we saw the publication of weekly export figures which continued to show disappointing figures for wheat and corn. The market sold off to lower levels in the afternoon and latter hours of the session. Soymeal sales were above expectation and beanoil was in the expected range leaving the soy complex to trade either side of unchanged.

In S America we have continued to see wet conditions persist and, according to Buenos Aires Grain Exchange (BAGE), both soybean and corn plantings behind normal for this time of year. In stark contrast, the dry conditions in S Brazil appear to be worsening with soil moisture reported to be displaying a four to five week moisture deficit equivalent to 2.5 to 3 inches. The crop moisture requirement for both soybeans and corn rises significantly when grown in this region compared with the US for example.

It is too early to assess the impact on output in either Argentina or Brazil right now, suffice to say the effect is not favourable and a change in weather conditions is necessary if crops are to fulfil their potential this season and provide relief to tightening global supplies.

EU wheat exports licenses were granted for 454,000 mt bringing the season to 8.177 million mt, this compares to 7.724 million my last year. We continue to maintain that this pace is not sustainable and the emphasis on global wheat trade must move away from the EU (probably to the US) in the very near future if acceptable year end stocks are to remain.