- We have seen Chicago markets trade back and forth this morning and as we approach the close soybeans are a shade down whilst the grains, corn and wheat are just in positive territory – a “non-day”. Crude oil, which is a little firmer is having a positive influence and the potentially large US summer row crops, which are only just around the corner suggest that caution should be adopted when making large purchases. Further US soybean sales to China have been noted and one can only wonder how much they will chase prices should they continue higher given the potential for a record large US crop.
- On the subject of China, it is reported that their government will halt reserve corn and soybean stock auctions in early October. The point being that if China is serious about shifting old crop stocks it will have to become more aggressive as far as prices are concerned in coming weeks, which could pressure prices.
- Weather prospects appear to be improving for pressured farmers in Germany and Poland, and the next ten days appears to offer a window of harvest opportunity. Their harvests have struggled over the past few weeks amid frequent rain showers, which have harmed quality and yield, and the forthcoming window should help harvest progress more strongly. Additional downgraded (to feed) wheat is the last thing required within the EU market at this time. Germany’s feed coops are forecasting their 2016 wheat crop at 24.21 million mt, some 8.8% below last year’s record output.
- Next week sees the start of the influential US Pro Farmer crop tour and it will be interesting to see if they validate the US’s latest yield estimates in corn and soybeans. We see little to trigger either bullish or bearish price trends until such time as we see the start of mainstream US harvest activity.