- CBOT markets have been mixed today with grains trading lower and old crop soybeans finding some strength from renewed fund buying and strong US cash markets.
- The old crop strength will direct US soybean export sales and world demand to S America or defer fresh sales into new crop positions. The July – November spread has reached a new high of $1.60 (July premium) today and from a cash perspective the US Gulf vs Paranagua FOB spread has reached $0.90 (Gulf premium) for February. Both elements should conspire to either push buyers towards the record large Brazilian crop or defer purchases to new crop positions.
- Interestingly we are seeing some confidence from Brazilian exporters who are offering guaranteed February load dates.
- In the US the National Oilseed Processors Association (NOPA) announced a record December soybean crush pace with 165.384 million bu, an increase from November’s 160.145 million bu. Expectations were high at 163.9 million bu, but even expectation was exceeded. Strong crush margins are cited as a key driver for the crush pace. January crossings are expected to be lower on account of the extreme weather conditions early in the month which caused logistical problems.
- Corn and wheat markets are lacklustre on the back of slow export demand and some aggressive farm selling on the back of the price rally earlier in the week.
- In other news Brazilian flour millers are once again pressing for a lifting of the 10% import tax, which is applied to North American wheat supplies, because of supply tightness caused by lack of Argentine supplies beyond the half million mt which was proposed earlier this week. A decision on the tax is anticipated in the next few weeks.