- CBOT grains (corn and wheat) as we approach the close are trading a touch lower today whilst the soybean complex is making some gains although the front month premium is somewhat lower than has been the case in recent days.
- We are in the week of “the report”, having had a two month gap since September’s release, and trying to peg where the market believes yield will be reported is not easy. Soybeans at 43 bu/acre and corn at 162 bu/acre seem to be somewhere close to trade consensus and variation by the USDA higher or lower is likely to provide some interesting price reaction on Friday. Regrettably, once again, Europe will be in the pub with a well earned gin and tonic by the time the report is published at 5pm (UK time) and we will have the whole weekend to digest the data before (possibly) playing catch-up with the US.
- Given the extent of US soybean demand, both domestic and export, it will be important for soybean yield to reach the 43 bu/acre mark otherwise we will be staring at a demand rationing price rally, possibly of some magnitude. China remains a keen buyer of US soybeans as their crush margins remain positive and US quality is high.
- The weekend saw Saudi Arabia purchase 720,000 mt of wheat from the EU, US, S America and Australia for delivery Jan – Mar ’14. Quality specification called for a minimum 12.5% protein content. It is believed that Egypt will return to the tender market prior to the USDA report on Friday. It has been interesting today that this wheat information has not created more support to the market.