- Markets have taken a turn to the downside with wheat leading the way, CBOT markets dropping over 2% and corn following in similar style. European wheat markets followed with losses also up to 2% being posted on the close.
- India’s statement that it will prioritise wheat exports ahead of rice and oilseed meals in the run up to their new harvest has led to views that an additional 5 million mt of wheat exports are in the offing. In addition, Lanworth, the Reuters owned crop forecaster, has raised its estimate of the US wheat harvest following recent snow and rains, which have improved spring growth prospects.
- Fund selling in wheat, where an existing net short position already exists, has added to today’s declines. It was also reported that funds were feature sellers of corn in addition to wheat. Technically, wheat is approaching some significant price support, which, if breached, will pave the way for further declines, conversely if it holds it could pave the way for higher levels.
- Earlier today we saw front month soybeans topping $15/bu once again, clearly this triggered some profit taking which has impacted prices throughout the rest of the day. It would appear that fears of being the last one holding old crop US soybeans before S American supplies are freely available is the “Sword of Damocles” which overhangs this market right now. However, we reiterate our often stated view that there is likely to be a supply issue in the US if demand continues at its current pace.
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