• Tomorrow may well be the winter solstice (shortest day) and the world may well be ending as predicted by the ancient Mayan civilisation but today’s price action across key commodities certainly had a feeling of Armageddon about it.

• We have seen a further day of plunging prices as China cancelled a further 540,000 mt US soybeans. We even heard tell of major banks advising clients to exit from commodities. Little wonder that it feels like the world and his wife want to leave this world clutching what little is left of their cash, if the Mayans are correct of course!

• The continued decline strengthens the bearish technical picture adding to the pressure of the moment. However, we do not see a change in fundamentals, despite being fearful of sounding like a record stuck in its groove. The trend is set strong at present and shows little sign of change right now. Year end profit taking and cash withdrawals may provide a short term dent in a strong market but what we are currently witnessing has a different feeling to it.

• In fundamental terms we saw US weekly exports published as follows:

Wheat: 671,200 mt which was above the estimate of 450-650,000 mt.
Corn: 120,200 mt which was below the estimate of 250-550,000 mt.
Soybeans: 629,900 mt which was below the estimate of 650-850,000 mt.
Soybean meal: 395,900 mt which was above the estimate of 200-300,000 mt.
Beanoil: negative 5,800 mt which was below the estimate of 20-40,000 mt.

• EU wheat export licences were granted for a further 600,000 mt bringing the season to date total to 10.133 million mt, which compares with 8.568 million mt at the same time last year.

• To make full sense of the last few days is difficult when faced with the fundamentals as we see them. We would not advise short positions at this time, the potential for a correction in the New Year is, in our opinion, significant.