Evening Comment – Wheat Corn Soybeans – 30/04/2015

Another day, another dollar move. But this time it seemed to be a euro move. EURUSD rebounded on technical during the day to approach 1.1250. Can’t really think about another reason as Euro macro stats today were pretty contrasted: in Germany retails sales are down -2.3% (+0.5% expected) and if there are less job seekers (-8k) it is a smaller decrease than expected (-14k was forecasted). On its side, the Euro Zone unemployment rate has not decreased and been published unchanged at  11.3%, slightly higher than expected (11.2%). Spanish Consumer Price Index is down -0.6% (‘less worse’ than expected actually, that’s a good news but on the other side the GDP quarter on quarter was actually up 0.9%). Contrasted with a negative tone so the obviousness of the EUR rebound is unclear on the fundamental side. Maybe it’s why it came back from its highs after this rebound. Good US stats might have helped a bit, unemployment claims came back better than expected (290k expected versus 262k actual). Dead cat bounce and return to 1.10? A bit early to say as EURUSD is still flirting with the 1.12 mark this evening.

 

European Union cleared 587kT of wheat (total for this marketing year 27.7MT), 203kT of barley (total for this marketing year 7.6MT). This is slightly less than last week (respectively 679kT and 142kT). US Export Sales were slightly above the expectations on wheat 400kT, but this includes a cancellation of 449kT of the old crop. 6 destinations roll their old crop to new crop. So really, nice sales for wheat new crop this week but if old crop wants to meet USDA expectations, it better pace up and sell rather than cancel or roll. Corn above expectations to 945kT, and soybeans mid-range of the expectations at 315kT (and is in a reverse situation compared to wheat: cancellation of new crop sales, from China who canceled two cargoes, while old crop is selling itself pretty nicely). 

 

Start of the day in the green but market turned around. USD higher and bullish momentum are leading some funds to cover their short feeding the strength but the bulk of the short is not panicking just yet and the market finally aborted the today’s rebound. Soybeans traders are fearing the strike in Argentina could impact logistics, there are some talks of strong demand from China (who just cancelled 2 ships last week…), Dalian Exchange is on a bullish momentum, all of this is clearly helping the soybeans a little bit. Still some fear US farmers will plant more corn and less soybeans.  Else a bit of eventless day. On Corn, market was chatting of delay in Ukraine planting and smaller acreage. Nothing much to talk about on wheat. Big picture is a reversal of yesterday rebound.

 

MATIF followed the same patter, morning up, afternoon down. A lot of positions adjustment, spread is slightly widening. On morning the longs put some pressure on the spread to roll, on the afternoon the shorts. Nice intraday range but rather a technical day with no real directional excitement. MATIF closed tomorrow, French labor day.

 

Both Iraq and South Korea postponed a tender of wheat, prices not good enough. Russia did not announce just yet the lift of the export tax but officials declared that the 2020 objective is to produce a grain crop of 120MT. ADM forecasted the UE 2015 soft Wheat crop to 139.1MT, USDA is more or less 2MT above.

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