- We start the week with the unsurprising news that 95% of those who voted in the Crimean referendum chose to be reunited with Russia. This is by no stretch of the imagination a landslide result, and is resulting in sanctions by the west against Russian officials in protest against Russia’s part in this “illegal” referendum. The news of the referendum result saw some relief in markets as Russian troops stayed in Russia rather than moving into eastern Ukraine as was perhaps feared.
- News that China has resold cargoes of Brazilian soybeans into the US for Apr/May arrival emerged today. Negative crush margins in China and tight supply in the US have assisted the deals (if correct). Observers are watching closely to see if this becomes more of a trend in coming days.
- It appears that fund activity has been limited and the approaching planting report at the end of the month may well be partially responsible. Some upward price movement developed on better than anticipated export inspections although we believe soybean exports (from the US) to be in sharp seasonal seasonal retreat right now.
- Dry conditions in key US winter wheat growing regions has continued to lend a degree of underlying support although there are mixed views on what degree of this will have upon eventual crop development. Across the EU, cereal crop development appears to be favourable.
- The declining Russian Rouble is expected to provide a boost to grain exports according to SovEcon who forecast a figure in excess of 24 million mt, which is higher than the previously estimated 23.1 million mt. Wheat is expected to make up between 17.4 and 17.8 million mt (previously 16.5 million mt) and corn 3.8 million mt (previously 3.5 million mt).
- Brazil’s soybean harvest is reported to have reached 59% complete, 7% higher than last week and 1% above a year ago. Key state, Mato Grosso, is behind last years level with some 84% gathered, but this is above the longer term average of 74%. Rio Grande is starting to harvest, and pace is expected to pick up quickly this week and add to the supply of crop reaching ports.