- This week has seen the first three days feature short covering of CBOT grains and soybeans sending prices rallying to their monthly highs. Today, Thursday, has the bulls expressing disappointment at the need for a bullish surprise on acres in Friday’s report to keep the rally alive. Selling has not been huge but the lack of demand remains the key feature and likely to weigh on prices into today’s close.
- China’s Dalian exchange has shown little inclination to follow Chicago higher, and it seems that interior cash prices are also failing to follow. Indeed, following the return to work after the week long holiday, Chinese soybean and corn prices fell to two week lows, initiating yet more disappointment for the bulls. Chinese crush margins are reported to have turned negative with their meal price decline and fresh cover from crushers is likely to be limited given their current extensive cover.
- It has been reported that the EU is asking banks to report their commodity exposure in view of the declines witnessed in markets and the struggles of certain commodity firms (??Glencore). Bank sensitivity clearly remains an issue!
- We await the key October report tomorrow with interest.