- We have been catching up with the last two days of travel and updating information, and will be limited in commentary tonight.
- Today has seen some short covering which has left markets a touch firmer albeit on limited volume. As prices rallied it was noted that producer hedge selling became a feature from S America as well as US growers, a point we have made previously and one which, if followed through as we believe, will keep a lid on prices going forward.
- Arrivals of soybeans in China are creating some downward pressure on crush margins and there is talk of resale offers being made, added to which the discount which Brazilian soybean prices have in relation to US supplies from Feb ’14 onwards is likely to limit price hikes.
- Yesterday we heard of further discoveries by Chinese authorities of unapproved GM varieties in US corn shipments. The discovery is likely to result in rejection of the material, which was the outcome following the first shipment found to contain the non-approved variety.
- Australia’s ABARES have unexpectedly increased their forecast for 2013/14 wheat to the third largest on record at 26.2 million mt, a 7% increase on September’s estimate. The gains appear to be a result better rainfall in the southwest of the country. Western Australia, the largest wheat producing state, saw a 31% leap in forecast output which is offsetting reduced output in eastern states. In contrast, the Commonwealth Bank of Australia have only predicted the crop to come in at 23.6 million mt blaming Eastern Australian drought and claiming that despite improved conditions in Western Australia, they were insufficient to compensate for losses in New South Wales.
- Informa Economics has released its latest batch of agricultural crop forecasts for 2013/14, including an increase in the Ukraine corn crop at 28.5 million mt, which is a 1 million mt increase, Brazilian soybean output at 88 million mt is an increase from 86.7 million mt last month whilst Argentine soybean production is left unchanged at 59.5 million mt. The Brazilian corn crop is reduced by 0.5 million mt to 70.6 million mt.
- Egypt’s GASC was once again back in the market with a purchase of 60,000 mt of wheat for late Dec ’13 shipment, from Romania on this occasion. Interestingly several commentators are questioning whether, or nor, the contract will ever be executed. The price paid, on a C&F basis, was around $8/mt below last week’s purchase from France. Offers were absent from Russia, Ukraine and the US. It is expected that Egypt will tender again for Dec ’13 shipment, and given the time frame, it will likely be sooner than later.