Thoughts From The Sunlounger

It's another torrid day of unbroken sunshine and temperatures well into the 90's here on the sunny Costa del Sol. Have thus far managed to resist the temptation to pop into Puerto Banus to try a bit of Jordan spotting.

Talking of resisting things, I see that the Chinese government continue to fail to be knocked over in the rush of takers at their weekly soybean auctions. Since they begain offering beans at the equivalent of $15/bushel three weeks agao they picked up zero interest in week one, zilch in week two and have today managed to offload a mightly 4,335 MT in this week's auction.

The cynics that said the announcement of the sales was merely an attempt to drive the market lower to buy some more US beans appear to have been vindicated.

August beans crashed below $10/bushel when the news was announced, and are now knocking on $12/bushel. Meanwhile China has been an ever present in the USDA's weekly export sales reports, and look certain to feature heavily again tomorrow.

A quick glance at the charts on the widget for US soybeans, corn and wheat throws up a stark contrast. Beans have rallied sharply in the last three weeks, whilst corn and wheat have barely moved.

I wouldn't normally glance at what the sugar market is doing, but with prices hitting all-time highs on a daily basis it's grabbing my attention. London white sugar closed at $512.50 last night, the highest since trading began. This morning it's popped up to $514.60 so far. I might pick up a few more sachets than normal at the airport tomorrow. It's a pity there isn't a futures market in KFC wet-wipes, I'd clean up!

ADM reported a drop of 83% in Q4 earnings yesterday. Corn processing reported a $11m operating loss, quite a turnaround from a $262m profit the year before. The recent EUR10 million reduction in their fine for their part in a citric acid price-fixing cartel should come in handy then!