- Chicago markets are somewhat more mixed today with the grains, corn and wheat trading with modest gains whilst soybeans are again lower on further fund selling. It is first notice day and positions are being pared back as debate rages hotly on just how high the US national soybean yield will be in the September report. Nov ’16 soybeans have dropped below the early August low of $9.43, and closing levels will bear close scrutiny for clues to further direction. News that Chinese delegates to the US are in the process of agreeing frame contracts is not hugely significant as they take place pretty much every year although it is a market talking point.
- Soybeans falling to two week lows, the ongoing big supply story amid general commodity weakness and US$ strength continue to lead the market. Improving crop condition in late August is rare and this is also foremost in price discussions at present, as is the lack of threatening weather into mid-September, which will likely benefit the crop further. Studies are starting to suggest that downside objectives are close at hand, hence our reluctance to join the bearish trend. We should remember that soybeans are a global crop and whilst US yield/output is close to being a “done deal”, we will not know the relevance of S American crop weather until year end. To that end US supply and demand is one factor and S America is another, we should not lose sight of that.
- Egypt cancelled its latest wheat tender having received a solitary Ukrainian offer, recall our suggestion that exporters may well be reluctant to engage in fresh activity in the light of the renewed zero tolerance ergot policy.
- Russia’s AgMinistry has proposed eliminating ite wheat export tariff effective 15 September. Whilst not a significant factor the key going forward will be export capacity and whether the prior record 25.5 million mt figure can be exceeded; winter conditions will be a major factor.
- Big or record US crops continue to be digested, while there is a first indication of demand rising at current cheap prices. A bullish outlook is not advised at this time. Whether NASS yields match expectations will be theme of mid-September.