Friday’s Comment – #Wheat #Corn #Soybeans – 14/08/2015

After two pretty dramatic days (pre USDA and USDA), market took a breather and rebounded sharply. It was fuelled by the usual August topic, dry weather. Funds bought 16,000 corn, 11,000 soybeans and 6,000 wheat. Corn and Soybeans long position are finding a bit of relief there… 

No surprises in the US exports sales. Everything was as expected: 422.2kT for wheat, 531.1kT for corn and 756.8kT for soybeans. Global volume is lower than last week though, only corn is up from one week to another.

 

Night session is giving back a bit of the yesterday’s gains.

 

It was so expectable… After two days down, Egypt GASC showed up. 115,000T of Ukrainian wheat was purchased as long as 60,000T of Russian wheat at an average of $194.74 CNF. Once again, there was an impressive amount of wheat offered: 1.12MT! 175kT from Ukraine, 645kT from Russia, 60kT from Romania and 240kT from France. No US wheat was offered this time. France is still very far in competitiveness. Indeed, the average CNF price booked by Egypt was only $3 dollars more than the best French FOB offer from Soufflet. Black Sea is eager to sell, offers were more than $5 better than the previous tender, with imports supposing to reach only 4MT this season, French wheat had better beginning to sell else another destination has to be found!

 

MATIF rebounded following US markets but in a lower extent. Market cannot forget the big fundamentals: there is a record crop, good quality, and it’s not exporting well… Small down at the opening. But the corn story can provide some support. French corn ratings are down again indeed, 55% of the corn is G/E, -3% from last week. Wheat harvest is 99% completed, +13% from last week. EU cleared 392kT of wheat export licences, some pace is needed to reach make up the delay to meet the USDA forecast.

 

In line with the Russian Deputy Prime Minister, RusAgroTrans is forecasting 100MT to 102MT of grains in Russia, 57MT for wheat and 12MT for corn. While IKAR says wheat will be 59.5MT to 60.5MT and corn 16.6MT to 16.8MT. There are some disagreement about the impact of the dry weather while the agriculture minister said 2 million hectares have suffered. Grains exports are expected to reach 25MT to 27MT by officials.

 

Argentine wheat acreage, according to Rosario, are down -0.1 million acres to 3.4 million acres. While producer will stop selling wheat, corn and soybeans from the 24th to the 29th Of August in order to try to convince the country’s presidential candidates to cut taxes on grain exports and ease quotas.

 

Japan bought 147,933T of wheat from USA, Canada and Australia. Pakistan bought 66kT of soybeans from Brazil. South Korea bought 60kT of corn, optional origin and 60kT of food corn form US and South America. Tunisia is tendering to buy wheat and barley, respectively 209kT and 175kT.

 

China keeps on playing with its currency. Third day in a row the rate versus dollar has been moved, this is -4.6% in three days… The central bank believe economic condition aren’t worth a drastic devaluation of the Yuan. EURUSD is still ranging on the higher bound of its range, in the mid 1.11’s. Greek parliament has passed the third bail out. Kind of déjà vu! Will the rest of the story repeat itself?

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