- Thursday was a quiet session in Chicago ahead of Fridays USDA release with few willing (or brave/foolhardy?) enough to take on new risk or position in advance of yield updates. Average trade estimates have drifted closer to the NASS August figure making market reaction Friday difficult to predict. Regardless, we continue to believe that any supply driven rally will crete a sales opportunity.
- The Brazilian Real has collapsed to a 13 year low in the aftermath of S&P downgrading their bonds to junk status and the prospect of an exchange rate of 4:1 vs. US$ is looking more of a possibility. Spot soybeans priced in Real are now up 35% from a year ago compared with spot soybean in US$ which are down 20%. The comparison is equivalent to $14/bu soybeans, which will likely more than offset cost of production. Acreage expansion looks highly likely and the USDA’s 3% growth projection could well be too low in the face of the present currency fluctuations.
- EU wheat export licences reached 368,257 mt this week which brings the season total to 4.04 million mt. This is 814,000 mt behind last season (or 83.23% of last year’s exports). World exporters, as well as those in Europe, are struggling to find fresh business. There is no word from Russia on their wheat export tariff revisions – if any. US weekly export figures are to be released later on Friday, a day later than usual, on account of the Labor Day holiday.