Funds continue to pressure markets heavily as they feel they have the market on the ropes.

We are pushing through the $4/bu barrier in wheat for the first time in 10 years and are we are approaching contract lows on the wheat/corn spread as well.

We expect the next CFTC report to show renewed fund selling activity across the markets and hitting fresh record short levels in wheat.

CBOT Wheat was down -13c to 370.5c, Kansas wheat down -15.5c to 374.25c, corn down -4.5c to 311.75c, soybeans down -3c to 964.25c, Winnipeg canola down -$3.5CAD to $456.2CAD, and Matif canola down -3€ to 371.25€. The Dow Jones up 107.59 to 18502.99 , Crude Oil down -0.69c to 46.95c, AUD up to 0.75744c, CAD up to 1.30153c, (AUDCAD 0.986) and the was EUR down to 1.11853c (AUDEUR 0.6771).

With HRW prices in particular where they are we are starting to find some interest into Africa and the Middle East. We expect Egypt to tender very soon and on paper the US prices are competing well and potentially even in front of Russia. Concern however still sits around the Egyptian line to restrict wheat with Ergot, which again keeps sellers nervous.

There is no doubt that whilst there is an excessive global supply of wheat, US wheat is now pricing exports, as a result continuing to keep the global wheat farmers selling tap tightly turned and we will see some reduction in wheat area as the northern hemisphere goes into planting mode in another month. US wheat exports were at expectation whilst corn and beans were at the high end of expectations.

Variable Storage Rates (VSR) were once again triggered. This happens when the reporting period sees spreads average more than 80% of full carry. We averaged, 83% and today sit at 99%. Storage was increased from 8c/month to 11c/month.

US crop conditions saw corn steady whilst beans are up 1%. Corn is 8% ahead of normal with 60% of the crop dented. Spring wheat 81% harvested (62% average) and beans is all but through pod set (94%).

The canola market continues to juggle the variable Canadian harvest results off with the political bun fight that continues over the black leg issue with China. China declared over the weekend that it will not be discussing the matter in Ottawa this week at the trade negotiations, much to the disgust of the Canadian lobby groups. It seems that the Chinese importer is looking to fill the void in the short-term with canola oil imports, a strong line up of vessels is noted in Vancouver. Harvest pace is 18% behind last year (only early days).

Local chickpea markets continue to get hammered following last week’s rain in the north. Prices are now off over $200 from their lofty highs a month ago.

Two cold fronts crossing the east on Wed and Friday still look well set up to bring more spring rain to the region.

• Source: Lachstock Consulting