- Today, Bank of England governor, Canadian born Mark Carney, announced the continuation of low interest rates until unemployment falls below 7%. The level currently stands at 7.8%. He additionally stated that until that threshold was reached the Bank would not cut back on its £375 billion asset purchase purchase programme. Sterling gained over $0.03 vs. the US$ and €0.02 vs. the Euro on the news which was deemed “good news” for business.
- Wheat prices in Chicago have come under pressure today rather than corn or the soybean complex as has been the case in recent weeks. Today’s price moves have seen the spread between Dec ’13 corn and wheat drop below $2.00/bu (at the time of writing) in a move seen as correcting towards a more “normal” level although some further additional correction has to be made before normality can be considered to be in place. The lack of additional fund selling, particularly in soybeans and wheat, probably attributable to the approaching WASDE report on Monday next week, could well be responsible for what seems to be lack of direction today.
- Monday’s report will provide interest, not least from whether the soybean acreage as well as average yield will be revised/adjusted, and is scheduled to be released at 5pm (UK time). Trade estimates for corn yield average under 158 bu/acre, many are talking 160 bu/acre, and with agreement already in place on plant populations being high, we could well be in for some surprises.
- In corn, China has reportedly purchased from Ukraine and additionally approved GM varieties for importation from Argentina. The change in sourcing policy fundamentally presents an interesting dynamic in the global trade for corn going forward.
- In the absence of fresh news to fire up the bulls or bears we look set for uninspiring and directionless markets which have only the continued favourable growing conditions which prevail across key global regions right now to provide guidance. In this light any rallies will be swiftly capped, and we continue to favour lower prices until such time as fresh news hits the headlines.