- CBOT markets have been trading lower today with pricing boards displaying virtually wall to wall red prices. August soybeans are almost $0.50c/bu lower at the time of writing and Dec corn finally broke through $4.91/bu having tested it twice previously, today’s low (so far) being $4.82/bu. We understand soybean and corn cash basis levels eased somewhat after yesterday’s rally, farmer selling was evident at higher levels but appears to be slowing and funds were actively selling across all ags today.
- The cause of the break in prices would appear to be rainfall, a wetter outlook and below average temperatures which triggered selling, once corn broke its $4.91 support sell “stops” were triggered adding to the momentum. Today’s corn price levels were last seen in 2011 prior to the drought induced jump in prices amid reduced yields and output
- Elsewhere there are few, if any, serious weather concerns and we look for lower prices in coming weeks.
- In the US the winter wheat harvest was reported as 75% complete, 1% behind average whilst spring wheat condition rating fell 2 points to 68% good/excellent, which is an improvement on the 60% rating this time last year.
- In the EU grain yields have been given an uplift by the EU’s MARS (Monitoring Agricultural Resources Unit) thanks to the recently improved weather conditions across the region. Soft wheat yield has been forecast at 5.69 mt/ha, an increase from 5.5 month on month and 5.42 year on year. Barley also rises, to 4.78 mt/ha compared with 4.68 month on month and 4.38 year on year. Corn was forecast at 7.22 mt/ha, an increase from 7.13 Monday and 6.08 year on year. Finally, rapeseed yield was seen at 3.08 mt/ha, up from 3.02 month on month but marginally down from 3.11 year on year.
- Reuters today reported improved prospects for Russia’s wheat harvest so far this season and expects an output of no less the 50 million mt, which will help to replenish last season’s depleted stocks and potentially assist export potential. As of 22 July wheat harvested amounted to 25.4 million mt, yield at 2.98 mt/ha compared with 2.44 mt/ha at the same time last season.
- Finally, the Egyptian story continues to roll on with reports that they are hoping to negotiate deferred payment terms with Russian suppliers! Having spent many years in a commercial business environment my reaction to a request from a buyer with questionable financial status for extended payment terms would not be printable in this report!