Evening Comment – #Wheat #Corn #Soybeans – 08/05/2015

Wheat is nervous. The WQC crop tour is the main catalyst, feeding a rebound. Some good and bad yields are seen in the south of the US. So basically, we have no real clue yet about the overall yield, let’s face it. Still hearing some light freezes can happened during the night. There is a bit of short covering as well (we’ll probably see it indeed in the CFTC Commitment of Traders later), next week will probably be a market mover so reducing the risk makes sense. Monday (crop progress and condition) and Wednesday (USDA WASDE). And with favorable weather conditions across the US plains this week-end, we can expect to stay in a position of an early planted crop. Corn and Soybeans were trying to follow wheat higher, trading sideways with no conviction and shyness but are currently displaying small reds.

 

As far as the WASDE is concerned, reflecting the export sales and ethanol data, we’ll probably see US ending stocks increasing in Corn and Wheat, decreasing in Soybeans. At the world scale, wheat might stay unchanged or small down, but corn and soybeans might increase. It’s however largely expected ending stocks after the new crop (first estimates on this report) will be lower on wheat and corn but higher on soybeans. But bottom line is the availabilities will be still very ample.

 

MATIF has done it again… Will K5/U5 spread pay the carry on Monday (its last day, good riddance)? At 18 cents per ton per day (plus a few movement fees) we’re not too far from the free lunch! And obviously, with a silo full (Senalia), it’s becoming slightly easier for a happy few well informed with easy access to storage certificates to stay short and decide what amount will be delivered, in other words controlling the spread. At every intercrop expiries, some markets participants are complaining about the lack of independence of accredited storage companies. U5 and Z5 slightly rebounding.

 

GBP still higher market sees positively the absolute majority of the Tories, while EURUSD lower, decent NFP.

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