- Today is a sad day for traditionalists, like us, the closing bell in Chicago will mark the last open outcry market in grain and soy futures, with all trade thereafter being electronic. Option trade will continue as previously but we will see the end of some 167 years of pit based trading come to an end!
- It has been an interesting start to the week, particularly in the light of recent higher prices, as we have seen improved US Midwest weather pressuring CBOT soybeans, corn and wheat (significantly earlier in the day). Some of the losses in wheat were pared back as speculative buying kicked in on the back of EU dryness and question marks over just how much damage may, or may not, have hit the crop which is just about to enter harvest. Do not forget that the recent US and world rally was sparked by “reduced supplies due to adverse weather”. How and when the rally ceases will also be a function of Mother Nature; thereafter it will be demand that will be the driver of price direction.
- Further market concerns remained over the Greek “Tragedy” which continues to play out in the mast bare faced display of brinkmanship (or blind hope) we can recall. The €uro showed less weakness than might have been expected but the issue has been rolling on for so long, maybe, just maybe, the market is already fully reflecting a Grexit.
- Crude oil (August WTI) fell more than $3/barrel on the potential for Iran seeing an easing of sanctions tied to a proposed nuclear deal, and this was its lowest level since April.
- The US weather outlook appears to be improving and this should see an easing or capping of the latest price rally, hopefully confirming our view of last week that a seasonal top is being formed. US export demand is at best sluggish in soybeans, corn and wheat with the limited Chinese soybean interest being filled by S America, and this looks as if it will remain the case well into October unless we see a substantial change in the current price relationship between S & N Americas.
- Closer to home whilst we saw Matif wheat close up 50c it is clear than nearby cash positions are searching for buyers, cash premiums in France, Germany and the Baltic were all falling in thin vessel lineups. The south/Balkans harvest reportedly beat the heat, expectations are rising up to Paris, but north of Paris is much more debatable (the Paris Basin should start harvesting this weekend). European temperatures are forecast to ease this week although they remain above normal but rain looks mostly confined to Germany, the Baltic, parts of central Europe and S Russia where there are reportedly some specific weight problems. Also, Russian exports in general are again a mess: as customs officials are reported to have no clear instructions on what price to use, they are reportedly taking average prices since 1st January from their own data, which is producing export taxes of $10-30 instead of just $1 – helpful to all concerned!