• Following yesterday’s USDA report markets soybean and corn markets continued to decline with wheat just managing to close in positive territory having traded in the red for much of the session.

• The USDA has today released its weekly export figures as detailed below:

Wheat; 427,300 mt which is within estimates of 400,000-600,000 mt.
Corn; 149,500 mt which is below estimates of 250,000-450,000 mt.
Soybeans; 480,700 mt which is within estimates of 450,000-600,000 mt.
Soybean Meal; 144,800 mt which is within estimates of 125,000-300,000 mt.
Soybean Oil; 13,200 mt which is within estimates of 10,000-20,000 mt.

• Brussels granted wheat export certificates totalling 200,303 mt bringing the season total up to 20,301,597 mt. This exceeds last year’s figure by 5.831 million mt (40.3%) with three weeks of the season to go.

• Today, Goldman Sachs declared corn and soybeans to be potentially extremely lucrative short trades for investors suggesting that increased confidence in global restocking would lead to lower price levels citing targets reduced by $1.75/bu for corn and as much as $2.50/bu for soybeans. The only obstacle in the way of such price reductions being weather they said! Large S American harvests and weak global consumption pointed towards further price weakness and possibly even lower price levels. Deutsche Bank joined the party by suggesting corn prices could well be seen as low as $3.60/bu although the 28 June planting report could mitigate such a level if the weather failed to cooperate. Rabobank suggested that despite the bearish report yesterday a more realistic scenario would materialise after the late June planting report.

• Questions have been asked over some of yesterday’s numbers, specifically Russian wheat export levels; an averaged output figure of 52 million mt with domestic consumption at 38 million mt leaves 14 million mt, government purchasing for stock replenishment amounting to 4 million mt leaves an exportable surplus of 10 million mt – less than the USDA’s 17 million mt figure (reduced by a million from last month). That said, we look towards 28 June and the stocks and seedings report which is likely to provide more detail and, in turn, the potential for surprise.

• We continue to believe that rallies in old crop prices on the back of tight supplies will impact and drag new crop higher to some extent, this will in our view create selling opportunities which will become apparent when more abundant new crop supplies become freely available and prices decline.