- Wednesday saw soybean markets in Chicago extend overnight gains on weather concerns and an expectation that the next crop rating release would show a further decline. Funds were reported to be buyers in beans, meal and oil throughout the session. Brazilian soybean meal exports this season have been well under last year but this week has seen a sharp and counter seasonal jump in meal export demand. The lineups show a 1.5 million mt volume scheduled to sail in the month of July, although it would be fair to assume some of this volume would roll into August purely from a logistical perspective. Brazilian meal offers currently stand at around $35-40 below US and some $15-20 below Argentine levels. Current suggestions are that US Plains soybean crop losses stand at 1 bushels/acre off the national yield and dry/drought conditions are continuing to edge east. The crop needs ideal conditions from now if the remainder of the season is to make up losses.
- US corn markets are adding weather premium and shrug off the wetter GFS weather model forecast. The current GFS model has been updated and is in better agreement with the EU model, however, the GFS forecast contains a much wetter profile in IA in the next ten days yet the trade show seems to be biased towards the EU forecast based upon previous better accuracy and performance. Quite how much rain falls across the W Corn Belt in the next 72 hours will be critical and we expect Thursday’s Drought Monitor release to an expansion of above normal drought.
- Wheat markets in Chicago ended steady with other classes lower as funds exit recently established long positions, which were record large in Kansas and Minneapolis. Fresh demand news was absent in wheat markets; we would suggest that downside in wheat is limited as problems in Canada and Australia show no sign of abating, indeed they appear to be worsening, and now we hear of frost issues in Brazil, which will potentially limit yields there too. Soil moisture levels in the Canadian Prairies continue to deteriorate. Global cash prices continue to show that sourcing higher protein wheat remains an issue.
- Cash wheat prices in Europe are about unchanged, but Russian levels are higher as concern levels rise as far as higher protein wheat (12.5% and above) is concerned. Russian August ’17 12.5% wheat is offered at $198/mt vs. $160/mt exactly a year ago, and todays offer is cheap in relation to other origins – please draw your own conclusion! Currencies in Russia, Canada and Australia are up on the week, and we would not expect to see exporters as aggressive this summer/autumn as was the case last year.