WITH nothing new to feed the bull, the grain market rally has temporarily stalled, leaving growers, traders and consumers in no-man's land as each punter waits for the next directional signal.
Uncertainty over the outcome of Friday night's USDA World Agricultural Supply Demand Estimates is also giving traders pause, with wildly variable guesses for corn and soybean yield estimates making the rounds.
For the here and now however, better than forecast weekend rains in the US mid-west were a kick to the guts of soybean bulls early in the week, but had a relatively muted effect on corn markets, where the US crop is already considered a shot duck.
Meanwhile, the global wheat trade has been ruminating on conflicting reports out of Russia, where "official" government statements suggest talk of a crop shortfall has been overstated, while private forecasters continue to ratchet down their production estimates.
There are on-again, off-again rumours of a 30% export tax on Russian wheat, but nothing has been confirmed (or denied).
And in consumer land, grain purchases for the most part remain hand to mouth with end-users reluctant to load up on what they feel could ultimately become high priced inventory.
This is true in domestic and international markets for both feed and milling grains.
The exception however, appears to be sovereign grain purchases, apparently for strategic purposes.
In the last week, we've seen Iran and Saudi Arabia enter this market with a 240,000MT and 290,000MT purchase respectively. The Iranian business included Baltic and German grain, but further details are sketchy.
The Saudi purchase was for 12.5% protein hard wheat with the origin at sellers option for either North America, South America, Australia or the EU, at US$366.50 CFR Jeddah, or US$379.50 CFR Damman.
These values represent a substantial discount to current track bids for suitable Aussie grain, which leads us to believe the origin will ultimately be Canadian, from whom recent offers have been aggressive.
The reality is however, that these purchases should not be seen as renewed consumptive demand for grain at current values.
Rather, this is all about the repositioning of trading stock into locations that governments see as strategic for their sovereign interests.
In a nutshell we expect price to remain directionless coming into the USDA report.
The market knows the US corn crop is toast; the market suspects problems in Russia are getting worse; the market is concerned about demand destruction but most of all the market is all too aware that corn and soybeans flirting with all time highs.
What the market doesn't know is where the darts will fall on Friday night.