• CBOT markets have reacted to the upside today on continued short covering and as news from US farm officials warned that soybean yields in Iowa, the US’s top producing state, could see only a small improvement over last season’s drought reduced yields. The caution referred to lower than average rainfall in July which may reduce yield. Consequently rainfall across the state in August will be watched closely and be viewed as critical to the crop which was described as “stressed” but helped by lower than average temperatures. The weather outlook for the next week to ten days is for dry and warmer conditions, which has raised concerns.

• Additional price pressures have arisen from the confusion created by the FSA, a branch of the USDA, who published their initial prevented planting and planted acreage figures. Uncertainty has now arisen from the 2013 US corn and soybean planted acreages within days of the latest USDA report released on Monday. This uncertainty has resulted in short covering in volume and an uplift in prices across the soybean complex, corn and wheat markets. Added to this we saw larger than expected weekly export sales (see below) and the bulls took heart as pricing boards displayed acres of green.

• One thing is for sure, and that is farmer reporting is not fully complete. Whilst this will no doubt sort itself out in the fullness of time, the market does not gain anything from such confusion and uncertainty.

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

Wheat; 495,600 mt which is below estimates of 550,000-750,000 mt.
Corn; 777,000 mt which is above estimates of 250,000-650,000 mt.
Soybeans; 1,882,900 mt which is above estimates of 900,000-1,200,000 mt.
Soybean Meal; 243,400 mt which is above estimates of 100,000-200,000 mt.
Soybean Oil; 7,800 mt which is within estimates of zero to 25,000 mt.

• London wheat resumed its more usual price discount to Paris basis closing levels and exchange rates at 6pm UK time today. London’s first three contract months saw losses whereas Paris made gains across the board. Gains in Paris come as little surprise given that French wheat (as well as Ukraine) continues to look the world’s cheapest right now.