- Monday has seen a down day as markets return to trading after the weekend. The dominant news has been rainfall across the US Plains over the weekend, which allowed CBOT wheat to decline some 4.5%, which led corn lower albeit to a lesser extent and grain/soybean spread unwinding left some support in the soybean complex. Today’s decline in Chicago wheat has left US prices closer to Black Sea and EU levels paving the way for potential competitiveness going forward.
- There is also news (as yet unconfirmed) that Russia will confirm later this week that it is to end the wheat export tariff on 30 June this year. There is no widespread panic selling on the news, and it remains to be seen whether the rumour becomes fact. The potential for the market to go lower, and potentially much lower, given normal weather and an end to the export tax is real. However, it must be borne in mind that if we see another ten days of unchanged weather in W Europe we will hear cries of “too hot and too dry”, which will offer price support – whether justified or not.
- Reuters report that the USDA has confirmed an outbreak of the lethal strain of H5N2 bird flu in a commercial chicken flock, which widens the impact of the virus that has already killed hundreds of thousands of turkeys this year. A flock of some 200,000 chickens in Wisconsin is infected according to the USDA.
- It is rumoured (strongly) that Argentina is about to release 2 million mt of corn and up to 100,000 mt of wheat export licences in coming days. The news comes as global prices appear to be in retreat and Argentina would appear to be keen to get fresh sales on the books before it is too late. Additional pressure comes from Brazil about to harvest a large corn crop and offer cheap exports well into the early US harvest period of October and November.
- All in all, this is certainly an interesting start to the week!