In foreign news, Argentina farmers have agreed to stop its strike for a period of 30 days to focus on negotiating with its government. This news is likely more beneficial for Argentine consumers more so than its export sector as restocking store shelves is expected to take precedence. Federal Food Inspectors have gone on strike at Brazil's Paranagua Port facility asking for higher wages. Brazil and the US are benefiting from the Argentine strike as world demand has shifted. The Brazilian government is unlikely to allow a strike to last long enough to benefit the US. In another part of the world, a Russian representative speaking at a conference in Egypt suggests the combined efforts of Russia, Kazakhstan and Ukraine could export more wheat in the 2008/09 marketing year than the US. Allendale's question is that with or without elevated export subsidies will it be enough to protect each of the individual countries food inflation? We view all three of the countries (including Argentina) as less than consistently dependable in meeting world export demand.
At home, overnight Tuesday, Egypt bought 126,000 tonnes of new crop wheat and they suggest in the next three months they plan to buy an additional 200,000 tonnes of USA wheat. Bangladesh suggests it plans to buy 1.5 million tonnes each of wheat and rice over a span of the next three months. The west regions of HRWW and spring wheat are notably dry and supportive to new crop futures. Good to excellent quality ratings remain below average for KS, OK and TX.
Fundamentally the trade is bullish to corn because of potentially smaller 2008 corn acres and ideas of spring planting delays with all this cold and wet weather across the Midwest and South. Already in this early 2008 growing season, for the month of March serious heat unit delays have been noted in OH, IN, IL, IA and MI.
In Soybeans, the Argentinean farm strike has landed the United States 4 to 5 cargos of old crop soybean sales to China. Announced during Wednesday's trade is a port strike in Brazil. Bearish to new crop soybeans is prospective large USA soybean acres for spring 2008. IF corn delays become serious, look for the trade to bear up on ideas of even more soybean acres.
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