- Trade in Chicago has been a back and forth affair as traders struggle to get to grips with ultimate price direction, low volume has added evidence of such indecision.Corn has continued to slide, unconvincingly, on the back of potentially record large global crop projections whilst wheat has basined a touch on some short covering and Black Sea price stabilisation (for now).
- Global weather and crop growing conditions look too good to permit any sustained rally in new crop prices, and as we approach July, fund liquidation is as inevitable as night following day! We appear to be witnessing a pattern of declines to start and end the week with something of a bounce in between, it will be interesting to see if this remains the pattern this week and next.
- Global exporters appear to be girding their loins for fierce competition this coming season . Argentine FOB corn bids have fallen sharply in recent days, Black Sea 12.5% wheat levels are trading well below US Gulf and Brazilian soybeans are offered well into US new crop positions. We could well see significant “harvest pressure” this season – for the first time in a number of years. This point appears to be corroborated by the lack of new US grain or soybean sales in this morning’s report, the US is currently uncompetitive, despite declining CBOT levels.
- Egypt’s GASC has reinstated the 13.5% moisture level for wheat imports (at least for the next nine months) which will bring EU, and France in particular, back into play. One side effect may well be that Black Sea prices decline still further in an attempt to remain still more competitive. Some continue to express concern over levels of farmer debt and consequent machinery availability together with lack of fertiliser and crop treatment programmes in Ukraine.
- Our inclination has been to start looking at taking some (small) new crop grain cover on the current price break. Prices have dipped considerably from the highs of recent weeks, and whilst we think there will be lower levels, an initial foray into the market and bargain hunting may yield some good value right now.