- The Tuesday return to work has seen CBOT prices decline with little in the way of bullish news to lift prices. It appears that the world and his wife want to sell corn below US FOB Gulf levels and the EU is reported to have sold wheat to Saudi Arabia at prices below current replacement (again) and to cap it all China has only two soybean vessels left in the US lineup, which is the lowest number since early August! Little wonder the bulls are hungry for news!
- A possible snippet for the bulls comes from news that China may be looking to but Mexican sorghum, which Mexico may then replace with US corn – but that could be scraping the bottom of the barrel as (at this time) we believe that Mexican grains are not approved for import into China (from a phytosanitary perspective). That said, China is still reputed to be awash with grain amid domestic prices that are significantly above world replacement levels due to minimum price guarantees to farmers by the Chinese government – and all that entails. China is also scheduled to begin its own corn auction in an effort to reduce stock levels.
- Finally, EU wheat prices continue to decline and it is suggested that farmers are concerned over high old crop stock levels, and particularly more so now that new crop is looking particularly favourable even this early in the season. France’s AgriMer reported the French soft wheat crop to be 91% good/excellent, which is a 1% week on week improvement and way ahead of last year’s condition at this time which was 76%. There could well be some concern over the uncertainty of what will/will not happen as far as the Russian export tax position is concerned, and this is certainly not providing confidence or market support – right now. Interestingly, we may well see US farmers facing the same position as their EU wheat counterparts when they have their crops in the ground – time will (as always) tell.
- Thursday will see the latest iteration of the USDA’s crop reports, and markets are unlikely to get too excitable before then.