- Following yesterday’s market price decline we have (unsurprisingly) seen something of a rebound as buyers sought both value, in relative terms, and profit taking opportunities. There was also perhaps some speculative “dipping of toes into the water” in an attempt to see if the upward price trend was still intact. The markets are at an interesting point right now and prices over the next few days could well determine longer term direction.
- Yesterday saw a response to a technically overbought market, coupled with what is reported to be massive producer selling not only in the US, but also S America and even Russia (if reports are to be believed). Such activity suggests that higher levels will be difficult to sustain and the bulls have to act both decisively and in volume if their current lofty perch is to remain secure and profitable.
- Cash basis for both soybeans and meal have continued to decline in Argentina, so much so that Argie meal can now trade into the US – profitably, as well as into Europe. Consequently, importer interest is starting to grow.
- We have today heard that one US soybean cargo has been the subject of a Chinese default, a rarity! This is unconfirmed, but if true is significant corroboration of the difficulties being experienced in China. Hot on the heels of soybean default news comes further rejection of corn by China, for MIR 162 contamination (again). Also a container of DDG’s was rejected for the same reason. China has reputedly cancelled over 221,000 mt of US corn and some 1.16 million mt (of committed sales) is, as yet, still to ship. Given the remote likelihood of MIR 162 approval this season, it looks increasingly unlikely that the unshipped tonnage will actually ship, which will ultimately add to US ending stocks.
- We have seen another 600,000 mt plus week of EU wheat export licences. The weekly total actually reached 616,172, which makes the season total 25.583 million mt. This is 7.38 million mt (42.9%) ahead of last year. The calculation to hit the USDA’s 29.5 million mt season requires 378,264 mt/week for the remaining 13 weeks of the season. Corn imports into the EU, on the other hand, were close to 400,000 mt again this week. This brings the season to 10.5 million mt, 250,000 mt short of last year’s full season total with three months still to go!