In this summer, the dispute is about if government should cancel the monopoly of Canadian Wheat Board. Recently, the House of Commons have started the second review for the legislation. It is estimated that the legislation of free trade by farmers will be approved by Christmas. The effects on the market is still uncertainty.1,2
In global market, we are focusing the increasing competition from Ukraine. As farmers invest more port facilities and use fertilizer to improve production, Ukraine expected 10 to 12 million wheat are available to export this year. In October, Ukrainian government removed the exporting tariff on corn and wheat. Ukrainian state office recently announced that they export 7,000 tons of wheat to Iran in September. The total exporting wheat reached 1.58 million tons in September.3
According to US wheat associates document, US policies are aimed to eliminate the monopoly of STES, such as CWB. In addition, they also try to negotiate about cancelling the tariffs with different countries. 4
Wheat: The wheat market quiet buoyant .Australia exports 150,000 tonne to Saudi Arabia. On the other hand, the market exist some instable factors. For example, the Ukraine export feed wheat to Malaysia at a low price.5 we might be careful when we enter the market this week.
Corn: First, according to USDA survey, the corn stays in short supply and strong demand, which might leads to the further rise of corn price.6 Second,Argentina has been unable to meet its 5% bioethanol mandate but Bunge Ltd. will begin building Argentina's largest ethanol mill this week and production of ethanol is planned to begin in 18 months. Currently the country is unable to meet demand, so we predict expanded production capabilities will lead to more corn from Argentina being consumed domestically which will lower global supply creating bullish pressure on US corn prices (intertemporal LOP). We suggest keeping an eye on whether corn or sugar acreage is planned to increase to meet this demand.7
Soybean: The export data shows the demand of soybeans is increasing to 53.5m bushels. Furthermore, the news that Chinese purchase soybeans will support the market. Then the demand from biofuel development is a strong support for soybean market. Therefore, the soybean oil market is a key indicator we might need to focus in the next few days.8
1.http://hqprincegeorge.com/news/local/news/Local/11/11/13/Zimmer-says-New-Wheat-Board-Bill-is-Service-to-Both 2.http://www.nationalpost.com/opinion/columnists/wheat+board+desperate+play/5694342/story.html 3.http://southeastfarmpress.com/grains/ukraine-competing-corn-feed-wheat-market 4.http://www.uswheat.org/whatWeDo/tradePolicy/doc/CCD15626D620282F852578710059827F/$File/USW%20Policy%20Priorities%202011.pdf?OpenElement 5.http://www.agrimoney.com/marketreport/evening-markets-charts-help-soybeans-buck-ags-weak-trend--1353.html 6. http://southeastfarmpress.com/markets/tight-stocks-strong-demand-continue-corn-market 7. http://www.bloomberg.com/news/2011-11-04/bunge-to-prepare-land-for-argentina-s-biggest-ethanol-fuel-plant.html 8. http://www.agrimoney.com/marketreport/evening-markets-charts-help-soybeans-buck-ags-weak-trend--1353.html