Market finished red across the board yesterday (although some settle are up due to the new awkward settlement process from CME), wheat, soybeans and corn seems to fail rebounding whenever there’s a bullish wave. Funds sold 4,000 lots of soybeans, sold 4,000 lots of wheat and bought 4,000 lots of corn. But now the estimations are very different from one estimator to another, difficult to have a clue with all the business now in Globex. Quiet night session so far, wheat and corn are still on the downside while soybeans is trying to rebound.
El Niño is still around, bringing wetter weather as usual but the concerns seem to be much lighter than a few weeks ago, we’re almost switching to ‘too hot’ concerns.
US export sales were weak on wheat, US wheat is far from being competitive and it might become a concern soon. Only 291kT of wheat were sold last week, below expectations. Beans were above expectations to 552.5kT while corn was in line 656.2kT. EU cleared 470,000T of wheat export licences last week. Season is starting well but slightly below the USDA pace, but it is still very early to speculate. Barley was at 287,000T.
MATIF got overly excited by the Mexico story and rebounded quite violently in good volumes, close to 60,000 lots traded yesterday on the Crop 15. Louis Dreyfus is said to have been sold 200kT of French wheat to Mexico indeed. US market should have react more than French market, even if it’s an unusual destination for French wheat, it just means SRW is not competitive at all. On Wednesday, Algeria has bought 400,000T of wheat between $222 and $224 CNF. As usual, there is no official result published so it might be more. Rumour has it, it’s a French coop who’s been really aggressive. Dry and hot weather fuelled the rebound as well and the concern on the corn are increasing, the MATIF Wheat Corn Spread continues to tighten. Strategie Grains cut the UE soft wheat production to 140.9MT, it’s -0.7MT compared to their last estimates. At mid-session, MATIF is slightly down, most likely it will be a quiet Friday.
EURUSD is back in the 1.08’s. Let’s wait for the next event on Greece to have a better view where the market wants to go but FED recently said that everything is on track to hike the rate in Q4 unless there are some new problem emerging… And Greece was specifically quoted. Also, US would be the only major Central bank to hike the rate with Brazil, some are beginning to bet it won’t happen in September.