Morning Comment – #Wheat #Corn #Soybeans – 14/07/2015

Funds are now estimated to be short only 9,000 lots of wheat, long 129,000 lots of corn and long 96,000 lots of soybeans. This is a drastic different picture than a few month back! Night session finished yesterday lower, wheat and soybeans were lower while corn followed lower more marginally, slow start of the week. Weather is improving, even in Canada and Australia! Wet enough for corn, not too wet for wheat and soybeans. But market is still nervous. Corn was maintaining itself on expected downgrade of the ratings, as well as beans while wheat harvest was relieving a bit of pressure during on wheat. During the day session, wheat weakness continued while corn and soybeans were higher on weather and speculation on the crop report. 

Export inspection were above expectations on corn (1,056kT), and in line for wheat and beans (respectively 250kT and 134kT). After market, the crop progress and condition report was published. Small surprise, Corn G/E were unchanged to 69% and is still above the 10 year average, while corn silking is at 27%, which is more or less the average. Soybeans were downgraded, G/E are now at 62% (-1%) but still slightly above the 10 year average. Spring wheat improved, G/E are now 71% (+1%) and the winter wheat harvest is at 65% (+10% compared to last week).

 

NOPA crush on Wednesday. Night session in Chicago is maintaining some strength.

 

Lack of liquidity on the MATIF, French traders were taking a day off yesterday as today is a bank holiday, the National Day (Bastille Day). Market will be opened though, but pretty quiet for sure. Market continued to go down quite sharply on weather improvement and better yields than expected. Harvest are pacing up all around France, UK barley is on, barley in eastern Europe and Black see is close to completion,… Yields are surprisingly good, quality is very decent, wheat has heterogeneous protein but still satisfactory. Rapeseed should kick off a larger scale soon while everyone is watching the skies, corn silking is kicking off and need rain.

 

Algeria is tendering to buy milling wheat, October shipment. Morocco has bought 175kT of soft wheat on its local market. GASC is tendering for delivery second half of August, it might be a battle between Black Sea and Black Sea! US wheat (not competitive) and French (harvest on) may be out of the picture.

 

This Agreekment (yep, that the new pun on the market, Grexit, Grexhausted, Greferundum,…) is pathetic when you think about it… Indeed, Tsipras has actually ended up with a worse agreement than the one he submit to the referendum! Even if he’s calming as a victory the fact he managed to ‘restructure’ the debt… Well, there is no write-off, just some maturities to be extended. That’s why it’s maybe not over yet. Indeed, a rebellion form Syriza’s MP to push Tsipras to resignation, the parliament voting against, the no-voters rioting in the streets,… Imagination has no limit! After 26 hours of sleep deprivation and being bullied (he’s been described as a beaten dog), threaten to be kicked out, to be forced to sell asset and put them in a Luxembourgian fund, Tsipras lamentably folded. He has been clearly humiliated, let’s face it. So, Greece will need to carry out a deep pension reform, economic reforms, privatisations, labour reforms, financial reforms, asset sell off… The plan has to be approved by Wednesday in the Parliament. One can wonder, even if he has been heavily criticized, if Varoufakis, former finance minister, was not a better man for the situation… And this morning, a few interviews of him in the paper, insinuating he’s been sacked for being too tough. Clearly, on the last round of negotiation, Tsipras hasn’t ne too tough and Varoufakis is surely having a laugh…

 

EURUSD came back down below 1.10, quite volatile hours, down early yesterday, back up on the deal announcement and thinking about it, are the problem of Europe now solved? Or getting worse? Britain has announced they’ll try to block the use of British funds to finance Greece. So there’s still some issue in the European Union.

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