- Midday comments:
- Soybeans look to be taking more freeze risk premium out of prices and the market feels as if the threat to the crop is minimal right now. Interestingly there is still good nearby cash demand fr=or soybeans in the US, and this is still providing some support. Expectations are now for quiet trade into Thursday’s USDA report when an upward revision to soybean yield is anticipated. The latest private forecast comes in at 47.1 bu/acre vs. 45.8 a month ago. Regardless of which estimate one looks at, the direction of forecasts shows an upward trend. Focus is not only on yield, World stocks look as if they could reach as much as 90 million mt, which is significantly over the previous record level, which stands at 70 million mt.
- In corn there is little in the way of fresh news overnight, particularly on the supply side. Doubts over US export volumes should China not return to the party continues to give the edge to the bears. Global end stocks look set to jump again on Thursday with a figure in excess of 190 million mt widely expected. Both Ukraine and Argentine FOB corn offers look to be discounted to US levels, which argues the latter is overpriced and needs to drop in order to compete. This season loos very much to be a “buyer’s market”.
- Wheat markets started softer as EU and US prices eased and news from Black Sea regions remained bearish. Additionally, expectation of increased global stocks to be announced Thursday added to downside momentum. The bulls only have heavy rain in Argentina and a slight risk of winter-kill in Australia, which may trim output in both countries, to cling on to.
- Evening Update
- The market has been quiet in the run up to the USDA report tomorrow, pretty much as expected, and there have been more losses. Short covering and position squaring to reduce exposure pre-report has been very much in evidence as has end users taking some cover.
- France, the EU’s top wheat exporter, is expected to see third country export volumes to tumble this season, potentially by as much as 35% and correspondingly stocks look set to rise dramatically according to France AgriMer. Exports of 8 million mt vs. 12.2 million mt last year were the figures quoted with the poor harvest weather impacting quality adversely. One interesting figure in the data was the French EU export number at 8.1 million mt, above last year’s 6.83 million mt. Why the rest of the EU needs French wheat this year, of all years, is beyond us!
- Matif wheat made further losses and contract lows in what seems to be a never-ending slide, although we know that it will end, the question being, “When?”