- St Valentine’s day is bringing little cheer to agricultural markets as corn failed yesterday to stem the tide of a ninth day of decline and today looking as if it is likely to make it a tenth day of decline in a row. The losses are not limited to corn either with both wheat and the soybean complex trading lower too. US weekly soybean export sales figures showed a net 4 million bu of cancellations which can only be construed as bearish; the market seeming to agree!
- Despite the soybean cancellation news it must be remembered that soybean exports to date still account for some 93% of the USDA’s annual figure, which is the second highest figure ever recorded; corn and wheat stand at 61% and 76% respectively, neither number is significantly out of line with past data and therefore not particularly bearish. The key driver of pricing currently appears to remain the bearish new crop outlook for “huge” crops; which are yet to be sown, let alone harvested!
- The ongoing queue of vessels in Brazilian ports continues to expand with vessel volumes reportedly exceeding 10 million mt, a figure never before seen. The larges volume is represented by soybean vessels, close to 7 million mt. These figures demonstrate just how anxious global buyers are to get their hands on the first new crop supplies to relieve tight supply chains. The key question will be, what will Brazil choose to load? We feel that soybeans will feature ahead of corn which will place a burden on alternative cereal suppliers around the globe until such time as the soybean pressure is relieved.
- In other news the US attaché has reported that China’s wheat harvest is overstated, and significantly so with a quoted 9 million mt figure being discussed. The implication being the requirement to import more than usual in an already stretched global marketplace.