- As the UK returned to work after a holiday extended weekend we witness Chicago markets following the macro signals, the principal one being the falloff in crude prices (down $3.50/barrel back to $45.50 basis Oct WTI) added to which the US DOW was sharply lower, by some 400 points. As corn, wheat and soybeans lacked fresh market news the macros took over as this week heads into an extended US weekend break for Labor Day.
- Currencies continue to play their bit as the Ruble has fallen to 66.4 vs. US$ and the Brazilian Real hit 3.664. As we have reported previously (more than once) the incentive for farmers to extend acres in those regions displaying weaker currencies continues to exist and we see no reason for this to change right now. This will doubtless add to burgeoning global stocks if mother nature plays her part. Russia is about to start winter wheat planting in earnest whilst Brazil will be sowing soybeans in a few short weeks and the incentive to increase acres must seem attractive.
- Algeria’s latest wheat tender is arguably sharply discounted as France (in particular) looks to secure demand ahead of the corn and sunflower harvest and global wheat markets continue to sink in the face of limited demand and the exporter’s full silos. It is simply a case of too much wheat chasing limited demand.
- Funds appear to be shedding length in corn as concerns continue to exist over US demand (domestic and export). Look for the funds having a square position before markets show any major resilience would be our take on things right now.