- After yesterday’s market excitement (tongue in cheek comment) we have seen US wheat futures recover from technically oversold levels whilst corn and soybeans sit near unchanged. Matif wheat has enjoyed a modest bounce off its contract lows but let’s be clear, there is nothing in the way of fresh bullish news to substantiate any lasting price uplift.
- US agri crop sales reporting announced a sale of new crop corn to Japan but nothing else, and we are starting to see global soybean complex demand in transition to S America. Brazilian and Argentine beans for April and further forward delivery are offered in the $321-$328/mt range, the lowest in years and this is as much as $20/mt below US Gulf levels. Both S American countries will start to battle it out for global volume sales once harvest really gets going in March
- France’s Farm Ministry has pegged new crop wheat seedings at a 5.2 million ha, an 80-year high, and a sizeable crop is in the making amid a lack of winterkill and adequate precipitation.
- Since late last summer, and following the USDA’s reduction in US grain demand and US soybean crush, the markets have digested a flood of bearish input with limited reaction noted today. Fresh news, however, continues to lean a bit negative, and we maintain that it’s critical to view semi-lasting bounces as limited in duration whilst everything else remains unchanged. Downside risk remains given “normal” weather.