• Markets have recovered somewhat today with London and Paris closing with some gains and just avoiding double digit losses across the week. In Chicago too it appears as if the markets are heading towards the highs of the week as fund buyers have emerged from the sidelines and value buyers in corn and wheat have decided that some value is now evident!
• The latest US soybean crush figures were released today by NOPA (National Oilseed Processors Association), the November figure was 157.3 million bu which, if extrapolated, reaches an annual total around 1,600 million bu. Crushers appear happy with margins and continue to source soybeans at relatively strong basis levels.

Courtesy International Agribusiness Group LLC

• Additionally, China continues to buy more soybeans from the US and next week’s export sales figures are expected to show a third consecutive million mt figure. The combination of strong crush and exports continues to drive our belief in tighter end stocks than currently forecast by the USDA.
• In the southern hemisphere Argentina’s BAGE has issued a warning that its wheat output will drop by as much as 30%, to 9.8 million mt, due to adverse wet weather conditions. They added that corn and soybean plantings were behind last year and that “yield expectations were reduced.” Interestingly BAGE’s wheat figure is below that of the USDA which, at 11.5 million mt, was only released this week!
• One point to watch going forward is the strong cooling which has recently developed in the equatorial Pacific Ocean over the last month. The La Niña phenomenon is known to be a drought maker in the central USA and typically affects hard red winter wheat regions more strongly than the western corn belt. If these cooling ocean conditions persist and develop further, hot on the heels of the current drought, we could well be facing an extremely dramatic season next year. The situation will warrant a close eye and further evidence of La Niña could well be the trigger to take some defensive action particularly in wheat, but also corn.