On Saturday it was announced that Egypt’s GASC had purchased another 60,000 mt wheat, this time for early March shipment, the award was (unsurprisingly) to the US. There was only one offer of French wheat, which at nearly $50 FOB over US soft red equated (after freight) to nearly $37 higher than the winning offer. The purchase was 60,000 mt, and aside from th tonnage purchased, the next best US offers were some $11/mt higher. We view the tonnage purchased as extremely good value, particularly in the light of everything else which was offered.
- Early trade today was higher, supported by dryness in Argentina and S Brazil, also by Informa Economics’ reduced forecast for overall S American soybean output in the coming season. Argentine tonnage was put at 54.5 million mt (down 3.9 million mt mom) and Brazil’s at 84 million mt (increased 1.1 million mt mom), cumulative S American output reduced by 2.8 million mt.
- Brazil’s AgRural forecast for their soybean crop was at 81.2 million mt, down a million mt mom as a consequence of rain reduced yields in the Matto Grosso region.
- The recent soy complex price rally has lifted levels to 2013 highs with some beginning to see the December highs as the next price target, for front month soybeans $15.01/bu and soybean meal prices targets are $455/ton.
- Eyes are now on the USDA’s Friday report where it is anticipated that US corn and soybean domestic consumption levels will be under close scrutiny whereas export numbers are certainly not pressured and may even be reduced to offset potentially increased domestic usage.