• Brazil’s CONAB has today released its latest forecast for 2013/14 corn and soybean output. Unsurprisingly, given favourable weather conditions, they have raised their estimate for corn to 78.97 million mt, from December’s figure of 78.78 million mt. The USDA’s latest figure stands at 70 million mt. For soybeans their forecast is 90.33 million mt, up from 90.03 last month; the USDA’s last estimate stands at 88 million mt. Possibly more telling is the widely quoted comment that the soybean crop could “easily” exceed 95 million mt with yields exceeding official estimates.

• Following a prolonged absence from the headlines, there is a reported fatality attributed to H5N1 bird flu. The victim was travelling to Canada, from Beijing in China when symptoms appeared. Chinese authorities are looking into the case, although first comments suggest that there is no other evidence of the virus in Beijing. As of mid-December there were 648 confirmed human cases of the disease of which 384 had been fatal. Whist it is reported to be difficult for humans to catch the disease, there are fears of mutation and pandemic.

• Following yesterday’s market decline we are seeing follow through selling, particularly in the grains (corn and wheat) which has followed through in both London and Paris. The decline in CBOT is much more marked than in either London or Paris, the soft red wheat price already around $20 below French. The simple explanation for the price dislocation being that the US wheat is “locked” due to the call on export facilities from soybeans and corn, added to which the bumper Canadian wheat crop is flowing into the US. There is an estimated 8 million mt combined US and Canadian exportable surplus, which is struggling for outlets.

• The USDA has today released its weekly export figures as detailed below:

Wheat: 294,800 mt which is within estimates of 200,000-500,000 mt.
Corn: 155,200 mt which is below estimates of 200,000-700,000 mt.
Soybeans: 156,200 mt which is below estimates of 450,000-950,000 mt.
Soybean meal: 62,800 mt which is within estimates of 50,000-175,000 mt.
Soybean oil: 33,500 mt which is within estimates of 0-60,000 mt.

• The above export figures represent season lows for soybeans, soybean meal and wheat. Front month markets in corn and wheat (Mar ’14) have posted contract lows whilst Nov ’14 soybeans have been flirting with (and broken below) the $11.00/bu level.

• Brussels has granted another big week of wheat export licences to start 2014 in the same manner that the 2013 season has progressed. The weekly total hit 734,260 mt, which brings the season total to 15.8 million mt. This is 4.75 million mt (42.9%) ahead of last year.