- Midday comments:
- As weather reports suggest less extremes of temperature by the weekend some of the weather inspired risk premium appears to be coming out of the market and focus is moving back to the fundamental explosion of supply in coming months. Soybeans look as if they will remain under pressure even after the US harvest is over based upon what looks likely to be huge plantings, or at least planting intentions at this stage. Thursday’s USDA report is expected to show a jump in soybean yields from the August data, and also talk is already circulating on an even bigger jump to final yield from the forthcoming September report.
- Corn, like soybeans, was impacted by both favourable weather and reduced freeze risk in coming days. The market will have a tough job holding onto gains in the face of what appears to be a huge upcoming crop. The market is anticipating a USDA yield marginally over 170 bu/acre, although the range includes as much as 174.1 at the high end.
- Wheat prices tended firmer on strong cash markets as farmer selling was limited and premium grades retained their concern over quantity, this was the only positive market influence.
- Evening update:
- CBOT corn, wheat and soybeans hit new lows as the US$ rallied to its strongest since 2010. Funds added to shorts or exited from “stale” longs. The new lows in Dec ’14 corn and Nov ’14 soybeans added to the bearish profile, likely to extend into the year end. Soybeans broke through the $10.00/bu level potentially triggering further declines.
- Delta and southern US corn and soybean yields continue to impress and make record larges in some cases. Some reports from early corn in Illinois are reporting 200 bu/acre leaving the question, “how big is big?”
- In Paris we saw the second straight contract low despite the forthcoming quiet week (Paris Bourse and USDA) and the upcoming Algerian tender. Cash buyers are scarce and farmer selling is also equally quiet, in relevant regions the farmer appears content to store wheat and sell corn and sunflower seed from the combine. Paris corn also made it’d fourth contract low in five sessions as cash markets saw zero bids! As harvest is just around the corner there is a feeling of desperation at the bearish news that seems to keep coming from US, S America and Black Sea.