Will it be a big up Tuesday reversal? Indeed, market began the week down across the board, all red but we’re now used to crazy volatility (realised, the implied is down…). Only ICE Canola is showing some momentum on the upside. Market continues to dig indeed! And if we put into perspective the two last months, this is some serious movements! In Chicago, wheat U5 went up 27.68% in June and down 18.92% in July! For soybeans, +14.73% and -8.47%, for corn, +18.12% and -12.09%. Funds are still long overall and some positions will begin to print some seriously losses…
Weather is great in the US, dry but not too hot. However, the month of August can be very damaging for Corn and Soybeans but every day elapsed without any issue is potentially a good news! WQC crop tour is forecasting 49.9 bushels per acre for wheat… It is their highest forecast ever!
Wheat harvest are close to completed, in the US, spring wheat is starting, some parts of Texas and Arkansas are even kicking off corn. North of France is being harvested. Even in the area where the heatwave had been serious, yields are surprising, quality is very decent… Above 38MT of wheat in France was not expected anymore but it seems we are going to be actually above. The Concern in Europe is focused on Corn where the crop conditions could be much better.
Ukraine has harvested 79%, 19.8MT of grains so far. There are some concerns about quality. Minister said he’s forecasting 36MT of export next season, +1.1MT compared the just ended season. Russia is at 24% and 37MT so far. The harvest is gathering some pace and this is putting some pressure on physical prices. But bad macro due to sanctions may keep pressure on the Rubble.
EURUSD marginally down, there’s no big news on the Greek front. Well, financial market reopened and was between -20% and -30% but recovered and is now ‘only’ -15%. No news on the FED which is expected to raise rates in September even if finally after carefully thinking about it they’d prefer not to. But they are squeezed between economy and politics.