Morning Comment – #Wheat #Corn #Soybeans – 30/07/2015

Another little bloodbath on wheat and Corn, only soybeans managed to keep the head out of the water. Indeed, it’s now clearer that the crop will be big in wheat, if some parts of the US will see lower yield due to wetness, other parts will see the huge benefits of rain… Bottom line, rain make grain indeed! Crop Tour in North Dakota and Minnesota is seeing some record yields. It’s still the start, let’s not get overly excited but it sounds good… Corn pollination is not stressed so condition could not really much better. Soybeans managed to close higher on front months as the supply on the cash is pretty tight, but the overall supply picture is very ample… It would be surprising to see price that close to 4 digits if the US harvest is reaching the current USDA forecast. 

Ethanol stocks rose to 19.648M barrels (from 19.559 last week) and production fell to 965,000 barrels (from 973,000 the week before). Sub $50 oil prices surely won’t help.

 

Funds sold 12,000 lots of corn, sold 8,000 lots of wheat and were even on soybeans. Reuters.

Funds sold 7,000 lots of corn, sold 4,000 lots of wheat and bought 3,000 lots of soybeans. ADM IS.

Basically, we have no clue!

 

Only El Niño is giving hope to the remaining bullish.

 

Small deserved rebound on the night session but for how long?

 

Exports sales are expected to be 350/800kT on Wheat, 800/1,100kT on Soybeans and 400/6000kT on Corn.

 

MATIF wheat fell as well, U5 below 180! Chicago surely helped to put pressure and the global mood of farmers, as far as their harvest is concerned, is good. Wheat and Barley, no issue, Corn, there are still fears, a dry and hot August could damage the crop but every day with no proven problem is a good news! Pretty active option, combo and put spread with ratio are clearly showing there’s a bit of panic in this sell off.

 

Tunisia bought less than expected, only 84,000T of milling wheat at $203 CNF.

 

EURUSD is ranging, back below 1,10, FED very likely to maintain the decision to hike rate in September. FOMC meeting stated it would be “appropriate to raise the target range for ted Federal funds rate when it has seen some further improvement in the labour market”. But some are betting the other way, speculation how much is “some” and pointing the lack of US inflation.

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