- Chicago soybean markets saw a lighter “inside” day of lighter trading with prices closing firmer on the close. There was little in the way of fresh market news aside from large export announcements and daily weather updates, which continue to project non-threatening conditions into mid-August. Soybean yield predictions are at, or near, record levels, and it is this which has been a key price driver in recent weeks whilst the huge export shipment and sales volumes have been largely ignored. These will likely become a more significant price driver going forward as soybean prices attempt to move up from key price support levels.
- Corn futures settled a touch higher as energy prices rebounded and new crop sales were announced. Thursday’s export sales figures are expected to be high in both old and new crop given a small drop in US Gulf basis levels and a slight hike in Black Sea premiums; the US appears to now officially be the cheapest corn origin through to November, and potentially so into early 2017! Dramatic boosts in export volume are unlikely but a sizeable export programme will doubtless build in time. Crop finishing weather across the midwest appears mixed into mid/late August with plenty of rain in the coming ten days but lingering and potentially damaging heat remains (high 90’s to low 100’s) across some of the region. Crop yields are being forecast as variable although a 168 bushels/acre number is widely anticipated and the earlier 173 plus bushels/acre level looks more remote given the warmth this summer so far. Continued lack of strength appears the theme although the stage seems set for a decent price recovery in mid to late autumn.
- In wheat the European cash markets eased a touch although quality concerns are spilling over into Germany. Russian wheat remains the world’s cheapest, and yield estimates there continue to grow. As we have previously suggested it seems that wheat quality premiums will continue to grow, certainly in Europe. This could bode well for US quality wheat export potential in coming months. The developing La Niña appears a heaven sent blessing to Australian farmers as better than average precipitation fell in July and vegetative health maps suggest better than trend yield potential is on the cards. Forecasts are calling for additional soaking rains on both coasts in the coming 10 to 12 days, which will continue to benefit crop potential. Australian cash fob prices have declined some 6-8% since late June and it feels as if Aussie exporters will be aggressive in holding on to Asian business this season.