Morning Comment – #Wheat #Corn #Soybeans – 05/08/2015

Trading sideways. It can be felt market want to take a breather after these multiple bloodbath but going higher is tough. Wheat rebound was aborted and actually finished lower. Trying again this morning on the night session. Purely technical. But background noise is still bearish, harvests are going on and continue to impress. But USDA WASDE on the 12th might create a wait and see behaviour preventing another bearish rally. 

Funds bought 6,000 corn, 5,000 soybeans and sold 4,000 wheat. Reuters.

Funds bought 4,000 corn, 5,000 soybeans and sold 4,000 wheat. ADM IS.

Pick the one you prefer on Corn… Sigh…

 

FC stone has published its yield survey on corn and soybeans… Respectively 165 and 45 bushel per acre. Although this is lower than what USDA expects so far (it might change on the 12th of August on the next USDA report), it would be the third best yield ever. Not too bad for drowned fields a few weeks ago! However, let’s not get excited too quickly, there is still a tough month, August and some are complaining already of the lack of rain and the heat. In Kansas, some farmers are seeing the corn leafs drying and the corn ears dropping. In Michigan and Indiana, some soybean sudden death syndrome is on. So let’s be careful indeed.

 

On the European side, wheat and barley is beginning to be old story and it seems pretty good, good quality and good quantity. France may have between 38.5 and 39MT of wheat! But the concerns of lack of rains high temperatures are resurfacing: Bloomberg is saying French corn is “fried by heat”. It seems to be slightly exaggerated, soon we’ll hear that zea mays everta (aka popcorn) can be heard, at night, popping on the cob… But it is concerning indeed and a decrease in temperatures would be welcome indeed as well as a bit of rain to bring back soil moisture.

 

MATIF went up following Chicago but closed to early! Correction expected the morning to realign with Chicago. Market is in holidays mood, a lot of traders are away. Harvest pressure, wheat could go lower as it’s actually an impressive harvest, the only concern that could bring some support is corn indeed.

 

Russia is talking about modifying the ceiling for the export tax calculation on Wheat, from 11,100 rubbles (tax is currently 50RUB till 11,100 RUB) to 15,000 rubbles, in other words, decreasing the tax slightly, indeed the FX move has been so strong that the tax is kicking off a lower dollar prices. That means that despite the rubbles collapse, there is still a lot of wheat to get out from Russia and limiting exports is not an option. Meanwhile, grain harvest is 27.9% done, so far, 13 million hectares have produced 42.2MT. Ukraine is at 85% of the first harvest, 8.7 million hectares harvested 30.1MT.

 

Egypt GASC is tendering for late September shipment. Once again, intra Black Sea competition is to expect. US and French to be forgotten… This might become an issue as Egypt stated recently the could reduce the imports to 4MT thanks to local purchase program. Better sell sooner rather than later to secure some exports!

 

EURUSD lower, still basically ranging back to its supports. Currently in mid 1.08’s.

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