Mid Session Comment – #Wheat #Corn #Soybeans – 11/08/2015

Monday rebound, Tuesday reversal so far. Wheat went up following Corn and Soybeans on technical and kind of panick just before the crop report. Well on this side, not much to say actually. Beans condition unchanged (still 63%) and corn condition unchanged as well (still 70% G/E). Just wheat has been downgraded to 69% G/E, -1% from last week, while winter wheat is 97% harvested, spring wheat is 28% harvested. Early wheat harvests! Yesterday, export inspection were inside the range of what was expected, 366kT for wheat, 805kT for corn and 152kT for soybeans. Wheat and Corn loadings are below last year so far, soybeans is above and will meet USDA expectations, while corn is going to be tight. It’s early in the season for wheat but so far, despite the lack of competitiveness, the USDA pace is spot on. 

Funds bought 5,000 corn, 4,500 wheat and 10,000 soybeans yesterday. So far, they are on their way to sell these lots back.

 

MATIF went up, following US markets. French wheat farmers and coop are selling this rebound, indeed, they are glad to see quantity, quality and higher prices… What else can you expect? As well, the market was fuelled by corn concerns, the European corn is not really drought resistant (non GMO) so a lot of corn will be missing, switch to wheat and corn imports are to expect.

 

French Agriculture Minister published its forecast for the wheat crop. 39.3MT, +4.8% from last year (+1.8MT) and cherry on the cake, the quality will be excellent compared to last years. Beware to the blending with last year’s remaining! Now everyone agrees it’s going to be a record amount of wheat harvested as the harvest is reaching an end. On the other side Corn is expected to be down to 13.2MT (-28%), more or less 5MT will be missing from last year, partially compensated by the amount of wheat available, this should not massively disturb the supply and demand balance. Barley and Rapeseed forecast are increased as well to respectively 12.2MT (+0.5MT compared to previous month estimate) and 5.1MT (+0.1MT compared to previous month estimate). So overall a pretty decent picture.

 

Temperatures are above normal and rain are below normal in Europe, the concerns of stress on the corn is not likely to be relieved.

 

Ukraine 2015 wheat harvest is 98% completed, so far, 26.2MT have been harvested, this is 12% more than last year at this date. As of June, Russia have exported 5.5MT of wheat so far in 2015, -0.2MT compared to last year, while this marketing year exports are down 40% to 2.29MT. Harvest being 39% completed, this might add some pressure on basis, a lot of wheat will have to leave Europe and Black Sea.

 

South Korea KFA bought 52,000T of soybean meals from south America, Q1 2016 delivery $403 CNF. Japan is tendering to buy 150,000T of wheat from USA, Canada or Australia. Jordan is tendering to buy 100,000T of wheat optional origin.

 

EURUSD still ranging on the top of the range, above 1.10 now. Agreement between Creditors and Greece for the third bail out is reached. Else, no real news, the bearish bias is still there. German ZEW (indicator of economic sentiment) was published at 25 (versus 32 expected), while French GDP is seen to be only 0.3% up in Q3 by the Banque de France.

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