- News has been limited as the US holiday has taken its toll on market activity, however, CBOT markets closed in an explosion of activity with the soybean complex sharply lower in late trade, corn also lower but to a lesser extent whilst wheat made somer further gains.
- Focussing on wheat to begin, the Russian Deputy Ag Minister, Dmitry Yuryev, advised that Russia will not ban grain exports in 2015 due to the sharp fall in the value of the Rouble, however, it could consider a variable tariff on grain exports. The trade seem to be dismissing any tariff adjustment in the near term as Russian export pace so far this year has made new record highs. Unless severe adverse weather conditions impact crop development and overwintering it is not expected that an export tax will be applied.
- From a technical chart perspective (in soybeans and meal) we have been watching the formation of a “head and shoulders” pattern in recent days, and it appears that this has been recognised and technical traders are jumping on board. There is a methodology that allows a calculation of the move, which is a mirror of the upside, and (if fulfilled) would provide good rewards to those who have the confidence to short the market.
- This is traditionally the time when seasonal “tops” are scored more often than not, and (given favourable S American weather) we could be in for a repetition this year.
- Now that the Thanksgiving holiday is behind us, and we return to a full week of trading next week, we would expect the fundamentals to reassert themselves and the older downtrend to be resumed.