- Slightly lower has been the morning trade with Chicago corn, soybeans, and wheat trading quietly lower. A foot of snow has fallen across Chicago and it is causing transportation snarls and limiting trading activity. Moreover, amid all the volatility of the financial markets this week, traders are just “worn out” amid the big swings of stock, currency and interest rate futures. We anticipate a mixed Chicago close. Traders well understand that Sunday night’s and Monday’s price activity will be like a big weather weekend in the US during July or early August. The need for soaking rain is immediate and totals from a system last evening were better than expected in about 20% of Southern and Central Argentina, and just a few spits elsewhere. It surely was not the rain that crops needed to stabilise or reverse their decline. Private estimates of Argentine corn and soybean crops are in decline, and the pace of yield cuts could quicken without immediate and soaking rains.
- Traders report that funds have sold 1,500 contracts of wheat, 3,400 contracts of corn, while being flat in soybeans. Soy product fund action includes; sales of 1,200 contracts of soyoil and 900 contracts of soymeal.
- Russian wheat is well covered by heavy snow which will hopefully prevent any weather concern as we head into late winter. Up to 15-24” of snow cover much of the Russian ag areas which will insulate wheat against the cold and provide needed moisture come spring. The outlook for the new crop Russian winter wheat remains positive. We initially peg the Russian all wheat crop at 77-80 million mt vs last year’s harvest of 85 million.
- Egypt’s GASC booked 360,000 mt of wheat in a snap overnight tender. 240,000 mt of Russian and 120,000 mt Romanian wheat was purchased with prices below their purchase last week. The replacement cost on the Russian wheat worked back to $193/mt, down some $4/mt from their last tender. Russian freight rates worked out to be $15/mt. The tender was seen as slightly bearish for world wheat prices as values dipped, which helped confirm sliding world wheat pricing. The weak results prompted selling in Chicago.
- The DOW continues to slide on additional investor liquidation and anxiety. US interest rates continue to rise which is providing a safety alternative to stock investing. We would remind readrers that it is a 10 year bull market in stocks and that like any bull, this one is mature. Some fund managers are moving to cash amid the coming financial market uncertainty.
- It’s a big weekend for Argentine crops. Private Argentine crop size estimates are in retreat with the rains overnight producing a few nice totals of over 1.00”, but regionally, leaving 75% of S Argentine crop areas as dry. It is all about soy products with Argentina exporting 51-54% of the world’s total.