Morning Comment – #Wheat #Corn #Soybeans – 16/07/2015

Eventless day but US are amazing. Wheat went down on dry weather (export sales today are estimated to be between 250kT to 350kT on wheat), the harvest is going on nicely but corn, after fears of too much wetness was up on too hot temperatures. Market is never happy! Corn was helped by a still pacey ethanol production (984,000 barrels per day, just down 3,000 barrels per day compared to last week) and lower stocks (19,710,000 barrels, down -101,000, so the decreased in stocks is not only due to lower production). Soybeans were down on profit taking. NOPA crush were 142.5M bushels in June, slightly higher than expected but more or less a fifth higher than last June. It’s crushing a lot indeed (from September to June, 1,498 million bushels have been crushed, up 5% compared to the year before) but market not really impressed, there’s a lot of soybeans to crush. 

Funds sold 3,000 wheat, bought 2,000 corn and sold 6,000 soybeans. Without a pit on futures, how it is estimated will remain a mystery…

 

CME reinstated force majeure on wheat and soybeans on Illinois river, level is still too high and loading stations are struggling to load.

 

The spectrum of a new heatwave has supported MATIF at the end of the session. People tend to forget there is something happing every year, quite every time at the same moment, in July and August. It is called summer. Yep, it is summer, hot and dry. Is there a need to panic, probably not just yet but it is the usual game pre-harvest, long farmers and are keen on seeing higher prices. Even in Black Sea it seems to be ‘less worse’ than expected. Indeed, as of 15th of July, Ukraine has harvested 24% of the wheat with a yield of 3.4T per hectare, this is +0.2T per hectare higher than last year. So it’s delayed but no worries at all at the moment. Fair concern is still corn that being said. A lot of Put Spread action in MATIF option.

 

EURUSD down, Greek parliament has voted in favour of the bail out. A few other countries will need to pass it through their parliament, France did. Huge debate, led by Brits, about the usage of the EFSF for bridge financing. Bottom line, Greece will suffer with Austerity and the some economist forecast it will hit tourism industry, one of the biggest asset of Greece. Economic recovery will be tough. So austerity, a lack of economic growth, a unsustainable debt (as described by the IMF) are put in the same equation, get ready to hear about Greece again and again in the future even if the short term solution is found. Question of time before it will go awfully wrong… EURUSD flirting with 1.09.

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