A brief commentary will be the order of the week as I am travelling. However, I will happily respond to specific points which may arise, email will be the best way to achieve this.

Markets started off higher this morning making positive noises with reports that the funds were, once again, buyers. However, reported US corn and wheat exports were disappointing and capped gains and markets are currently trading below the highs of the day. Clearly, markets are nervous and appear to be searching a more definite “signal” before trading higher in strong fashion.

US Export data
                  W/E 29 Nov ’12         Year to date           Last year
Wheat        14.19 million bu         461 million bu        533.6 mil bu (-13%)
Corn           9.63 million bu          208.3 million bu     401.0 mil bu (-58%)
Soybeans   51.08 million bu         600.3 million bu    429.1 mil bu (+40%)

Saturday saw Egyptian wheat tenders awarded, and as expected, the US was the recipient of 280,000 mt. Additional tonnages went to Romania and France (60,000 each). The next question is, “when will Egypt be back to the table for more?” Our guess is that it will be the New Year but only time will tell.

The tender award probably marks the necessary slowdown in EU exports and the start of a stronger emphasis upon US origin material as we have been suggesting in recent weeks. The outlook for other regions remains bleak to say the least; Argentina has stopped issuing wheat export licences, their crop being described as “disastrous”, as much as 50% of the Uruguayan crop could be downgraded to feed grade and some Brazilian milling wheat sales are either being washed out or converted to feed grade. This leads us to assume that the S American balance sheet will need some revisions before too long!

The wheat outlook is not improving in our opinion.