- Chicago markets are trending lower as we head to the close and some contracts are heading towards contract lows once again. There is doubtless some pre-report positioning ahead of tomorrow’s report, exits from long soybean oil/short soybean meal have been reported although volume has been subdued. The S American harvest is picking up pace and it feels as if this will currently limit rallies from both a duration and size perspective.
- Global macros, including equity markets have been in something of a meltdown with the Dow shedding 300 points and crude oil has again dipped below the $30/barrel mark. European and US bank shares have seen some of the biggest hits leaving some questioning future credit risk – something worth watching.
- As much as 90% of the Argentine soybean crop has been reported to be rated good/excellent in a report sanctioned by the Argentine government. Old crop Argy beans are trading at at significant $30 premium to new crop, which appears to be encouraging farmer selling of their hoarded supplies, particularly now as much needed rains have fallen across a broad swath of the pampas. With the Peso in decline it would seem eminently sensible for the farmer to take advantage of the nearby premium.
- The Russian government has not made an announcement on export duties as was expected. The prospect for an increase in wheat export duty is looking unlikely due to the falling value of the Ruble, although some believe a modest duty may be imposed on corn and/or barley exports. Recall that Russia needs hard currency for their economy.
- Chicago markets look to be stuck with the fallout from global financial markets and a test of contract lows is looking entirely possible. Soybean meal looks as if it will struggle to sustain any significant gains in the face of weakening US cash demand. Global fob offers for wheat, corn and soybeans continue to weaken as they try and find some demand.