Morning Comment – #Wheat #Corn #Soybeans – 11/05/2015

US Market will certainly await thrilling the crop progress and condition report today and the WASDE on Wednesday (with first data of the new crop) It’s been planting all over week-end, pictures of good looking already emerged corn are surfacing on Twitter: American farmers are great users and it’s a great tool to follow the planting. There’s probably a bias though, we’re seeing the tails: very good looking ore very ugly crops, but does this give a real estimation of the average quality? Not sure. But always interesting and entertaining. A few pictures of flooded wheat and corn are surfacing indeed. Still some concerns about low temperatures at night and poor yields in Kansas from the WQC crop tour. Lower than expected to be honest rather than poor, WQC still assume the wheat crop will be more or less 20% up compared to last year in Kansas.

 

Official CFTC figures (as of Tuesday) are showing Corn and Wheat increasing short to respectively -136,000 lots and -111,000 lots. Soybeans slight decrease their short to -16,000 lots. Kansas Wheat on its side is -14,000 lots short. Still a lot of short going on, Wednesday to Friday has seen some short covering though. Risk off before the storm: this week is likely to move but it would not be the first time long expected report are actual non-event.

 

Watch out MATIF K5, it should be fun on its last day of expiry. Really close to pay the carry, 1 week ago this sounded unrealistic with the pressure put on K5 by the rolls of the shorts. Last week it lost almost 15%: great availability and cash premium going down. In France, wheat quality is G/VG at 90% versus 74% last year, Corn is 82% planted (that’s 4% in one week, slightly different pace than the US farmers!). Everything is happening well so far in Europe, France and Germany on the weather side, so far so good. Added to the fact that wheat is piling up in France, a lot of wheat still have to come out of Russia, that is some interesting supply profiling.

 

Still some concerns in South America about the logistics, helping soybeans to rebound in the night session. China is slightly short supply now, so it’s expected they’ll show some more aggressive bids soon.

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