The main event was the wheat rebounding, it was clearly on fire! It is still unclear if the reasons found to justify this were actual trigger or are a post-justification. Indeed, there is no fundamental brand new news that clearly justify this so far. Indeed, the quality concerns are known since the WQC crop tour, wetness is Texas and Oklahoma, India lower quality and quantity might lead them to import Australian wheat,… Anyway, market going up was triggering stops on its way and funds have bought a nice amount of contracts: 18,000, they might now be below the 100,000 contract short mark. Caution is required these days. Corn has been attracted in this wheat bull run as well and fund bought 8,000 contracts.
Is this seasonality kicking in? There are a lot of assumption on yields, quality,… We’ll know for sure only once harvested so traditionally, the summer is an open door to weather market and speculation and the pressure is usually coming back when grains are entering in the silos during the harvest.
Informa said Corn will be 88.7 million acre in the US, while USDA has 89.2, similarly spring wheat is at 13,2 million acres versus 13 for the USDA. But soybeans are at 87.2 compared to the 84.6 form the USDA. Mixed picyutre but it’s still a lot.
EURUSD lower this morning but still flirting with 1.14. However, Greece coming back in the headline is just a question of days or weeks. It might lead the Euro to have a reality check.
Night session is still strong in Chicago, a bit more short covering for a Friday is expectable if markets keeps on going up.
MATIF has just opened on a positive note. Just before the opening, best bids were at 177.50 on U5, quite a lot of markets participants were keen on securing lots at the opening. But finally stabilized at +0.75.