- Chicago markets have started the week with the grains, corn and wheat, lower and soybeans trading in positive territory. Weekly US export inspections remain robust with weekly soybean figures near record high levels. Clearly export demand for the US is positive and as a consequence becoming bearish is somewhat difficult until such time as we are more informed upon how S American crops are faring.
- It has been noticeable that cash wheat prices in India have been escalating and it seems that their import campaign will continue for the foreseeable future. Black Sea wheat prices firmed at the end of last week despite Egypt’s currency float and associated devaluation, the US remains well placed to pick up global trade at the present time.
- In S America the latest weather forecast is unchanged with some less than welcome rains in the wettest parts of Argentina’s southern agricultural belt for the next few days, however dry and warmer weather is currently scheduled to follow. That aside, normal to above normal rain is forecast across most of C and N Brazil, which will help to replenish soil moisture levels there with even the dries parts on NE Brazil getting better rain chances into late November.. Whilst planting delays are noted in Argentina we see the overall climate as non-threatening at this time.
- Overall, whilst we have seen barn busting soybean and corn yields and bountiful wheat supplies in the US this season, there is doubtless pressure on S America to perform. Consequently, if there is going to be a move lower in prices it is unlikely until early 2017 when the state of play in S America is better understood. We have seen in previous years a degree of “counting the (S American) chickens” before their crops are guaranteed, we should ensure that we do not fall into this trap in the coming year.