- Tuesday has seen Chicago pricing boards displaying acres of red as prices have declined, sharply in some cases. It would be realistic to suggest an average of 1.5% has been shed from prices in today’s session (which, to be fair, is not yet over as we write this). Favourable US and world weather and the potential for record harvests has been the main driver of today’s price direction. Old crop soybeans have led the way lower for a change as straight liquidation and old/new crop bear spreading has featured. We have been advised that general fund long liquidation has been evident in the latter part of the session today. It appears that funds are getting tired of stale and losing net long positions right now.
- Of interest in Chicago, despite today’s declines, is the spread between new crop soybeans and corn, which at 2.7:1 feels too wide. The price of Nov ’14 soybeans, in relation to Dec ’14 corn, just looks wrong right now and we would expect to see this spread close – ultimately.
- Wheat from the Black Sea region is searching for buyers with prices looking lower once again. Buyers continue to remain reluctant to commit to the region for fear of further instability, particularly as US President Obama has suggested beefing up the US military presence in Eastern Europe in a counter to “ongoing Russian aggression”. To date there has been nothing to suggest that availability of wheat and other grains and oilseeds is anything other than “business as usual” – so far.
- US crop conditions were reported last night, corn was reported to be 95% planted, 1% ahead of expectation and five year average. The crop is 76% good/excellent compared with 63% year on year. Soybeans were 78% planted, up from estimates of 75%, 59% week on week, 55% year on year and above the five year average of 70%. Emergence was reported as 50%, above last week’s 25%, 29% year on year and five year average of 45%. Winter wheat was reported to be 30% good/excellent, unchanged week on week and year on year. Spring wheat was reported to be 88% planted, the same as the five year average, and is 67% emerged, which is up from last year’s 58% but below the five year average of 72%.