Morning Comment – #Wheat #Corn #Soybeans – 21/07/2015

A nice trendy day yesterday but not a lot to say about it, it was pretty straightforward: weather related. Drier and hotter. Still a bit worrying for Canada Wheat and Canola, on one side, there’s some rain but not on the other side it’s not necessarily where it’s mostly needed. Funds are said to have been sellers of 6,000 soybeans, 8,000 corn and 4,000 wheat. Funds are rally quick to change their mind a since a few sessions, they don’t hesitate to flip back the long position they have built. Night session seems to want to rebound, taking a breather after this sharp selloff. 

The Egypt GASC purchaser, I mentioned it already but it is still true, very true, cannot be blamed to have an inconsistent purchasing strategy. Whenever there is a big sell-off, they are consistently sniping some more wheat. The tender is for first half September, it will probably be a Black-Sea battle, French probably won’t be competitive while US… Well… They cannot even sell to Mexico, so… Well, in Russia there is still some talks about the export tax and it’s calculation, some exporter are upset.

 

Soybeans development is back on track, flowers and pods are more or less on time, consistent with the 5 year average but there was no change on the ratings just yet though (62% G/E and 11% P/VP, much lower quality than last year), indeed, soybeans have really suffered from wet weather earlier this season. Corn silking is in advance compared to last year and just shy of the 5 years average. Despite the wet wether at earlier stage of development, the silking process is clearly happening in good condition, corn is not too much stressed. As well, it no improvement of ratings (69% G/E, 9% P/VP, obviously below last year’s ratings), market is hoping for improvement since a few weeks. Seems like USDA is very cautious. Farmers on Twitter seemed happy, getting on trucks and harvesting all week-end long in a cloud of wheat-dust, posting stunning pictures. It could be felt that the harvest has reached a very good pace and indeed, we’re now above last year and above the 5 year average (both 74%): the harvest of winter wheat is 75% completed! Spring wheat on its side is downgraded, -1% G/E to 70% and +1% P/VP to 7%.

 

MATIF fell, following Chicago, French harvest is going on very well and reports are good, good quality and good yields. Algeria wheat sellers are said to be short for around 1MT and it’s expected to maintain slightly the market but on a big day, 20,000 lots could be pretty transparent. Quiet start of the day, flattish.

 

EURUSD still in the 1.08’s, still thinking about where to go after these events on Greece. Greece have repaid the IMF and is not ‘in arrears’ anymore! But wallet will be getting dry pretty soon and Austerity might hurt Greece, so one can be afraid of being in the Groundhog Day movie: history will repeat itself again and again…

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