Afternoon Comment – #Wheat #Corn #Soybeans – 23/09/2015

US markets were down yesterday on a lack of fundamental news, heavy supply are keeping putting some pressure on prices. Global fragile macro is as well not really helping. US plantings and harvest are going well. Funds were on the sell side, they sold 6,000 corn, 8,000 soybeans and were even on wheat. Different picture today, everything is rallying. Frost risk in Australia and dryness in Ukraine and Russia seem to be enough for triggering a bullish session. US Wheat Associates is forecasting 14.2% of protein for the spring wheat, +0.6% compared to last year. 

Brazilian Real is down 34% since the beginning of the year. Despite lower US prices, soybeans and corn framers in brazil are cashing good money. First corn planting are reaching 13% in Brazil. Corn seems to have managed to escape trouble from the last frost and hail wave.

 

Chinese delegation seems to do its traditional purchase in town, USDA reported the sale of 284,500T. We’ll see export sales later this week, but this is totally expected to be stronger for soybeans, so no real excitement: 2MT to 5MT are expected to go in the next couple of weeks.

 

US ethanol production was down -161,000 barrels from last week, while stocks were up 609,000 barrels. The corn used last week as below USDA target.

 

MATIF rebounded yesterday… Well in the last moment of the session, drastic recovery after trading down most of the day. Rebound is continuing today, price are trying to get out of the bearish canal. Against fundamentals, this will certainly give selling opportunity to coops, meanwhile, cash premiums are still actual discounts of at least -10 euros per ton. That being said, there some dryness concerns in the Black Sea, this could potentially be bad for planting. The concern might come a bit too early as the previous harvest is not even completed. MATIF was helped by a lower EURUSD with ECB keen on pursuing quantitative easing.

 

Iran has lifted its import tax on wheat and barley. Still no move in Russia, Economy and Agriculture ministers seems in disagreement.

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