Morning Comment – #Wheat #Corn #Soybeans – 04/06/2015

Soybeans down while soy oil up, corn flattish up, wheat down. It looks pretty dull this way but what a day… Volatility is the word. Funds sold 2,000 soybeans, bought 2,000 meal, bought 5,500 oil. They sold 3,000 wheat and were even on corn. Finally a bit of respite in W/C spread… 

18 cents range on wheat July, market is pretty nervous! USD down, weather market, short covering, stop triggering: wheat started up showing two digits up but came back before the close to close on the downside. Kansas is said to be too wet, this will prevent both wheat harvest and soybeans seeding. On the other side, on the north of the US, rain is beginning to be needed.

 

Take profit of recent new longs and selling the rebound seems to be one of the possible explanation to the aborted bullish run. Worries have not disappeared by any means but on the other side, are they completely justified? That summing it up: until the crop are at an advanced development or harvested, let’s admit it: no clue! It will be good, for sure, but market has been prepared beyond this, fund are expecting a very good or excellent supply and demand balance.

 

On the bearish side of news, Informa forecasted HRW crop to 867 million bushels, +14 million bushels compared to the USDA. SRW to 411 million bushels (-5 million bushels compared to USDA) and white wheat to 202 million bushels (-1 million bushels compared to USDA). Overall, all wheat is expected to reach 2.143 billion bushels (+56 million bushels compared to USDA), this is 58.32MT (+1.52MT compared to USDA). It is better than the USDA but Informa actually marginally decreased its estimate (-4 million bushels)

 

Ethanol production was up +3,000 barrels per day last week and stock where down 29,000 barrels. Export sales today.

 

MATIF has done the same for a few days. Teacher’s pet following Chicago in its shade despite a stronger EURUSD. Up during the day and closing in the red. Still a lot of interest in volatilities strategy.

 

Greece talks, EUR 300 million is due to the IMF on Friday. A deal will be found. This time. EURUSD still strong then, above 1.12. Market might realise anyway that all problems haven’t been solved. German PMI and Eurozone Retail PMI today on top as well as US jobless claims.

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