Bad day for commodities yesterday, Oil and Copper were slashed -3%, Canola, Soybeans, Soymeals, Corn -1.5% or so, Soyoil -2.5%… But wheat is still the UFO and managed to trade down 2 ticks on Z5 at the end of the session… Very technical market on wheat, a lot of action on the calendar spreads, they are all over the place. The bearish figures of wheat export sales did not even help. Funds sold 10,000 lots of corn, 11,000 lots of soybeans and were even in wheat. 

But wat a choppy session, trading sideways a bit everywhere, very messy. Night session quiet, so far wheat down (but there’s a long way to go to become competitive facing other origins), soybeans mixed and corn, as usual flattish!


US weather dryness concerns are now far away. The last drought monitor clearly showed that the whole Midwest had the soil moisture reestablished and wheat can emerge in good condition before dormancy.


US export sales were an abyssal little 105,600T on wheat, a third of the most pessimistic estimates. Corn were in the range of what was expected to 574,900T while Chinese party seems to be over on soybeans, only 656,500T were sold, half of the most pessimistic expectations. This is a reminder than US is lagging on its exports: 6MT on corn! Corn might have a wakeup call on the next USDA WASDE report on the 10th of November and finally get away from the range it’s stick in. Wheat on its side is lagging now 2.6MT compared to last year. Market still wonders if USDA will reduce the exports on this occasion.


EU cleared 293,000T of soft wheat export licenses, slightly up from last week (+22,000T), bringing the total for the season to 7.1MT, still the pace is very slow and is likely, if there’s no substantial boost, to miss the targets. Barley has done better than last week also, to 100,000T (+31,000T) with a season total of 4.3MT. Corn imports are still very steady, although they came lower than last week (-132,000T), EU still cleared 442,000T of imports, bringing the total this season to 3.3MT.


The wheat rumor is persistent in Ukraine. Adverse conditions of plantings and lower surfaces than expected in wheat is said to be pushing Ukraine to put a voluntary export limitation. This is very early and would probably be over cautious and even a bit of a paradox taking into account the three great crops in a row: 13/14 was 22.28MT, 14/15 was 24.75MT and current USDA’s estimates is 27MT! From beginning stocks of the crop 13/14 of 2.58MT, ending stocks are expected to be this year 4.53MT, this is +76%, stocks will be 17% of the production and 36% of the domestic use. There’s a bit of a buffer there, and in a such competitive world (three last wheat world crop are 715.11MT, 725.49MT and currently 731.61MT according to the latest USDA) an export restriction can be more damaging than beneficial, Russia made the experience (although the reason were much more price and currency related). So to sum up a credible rumor but some skepticism is allowed.


Japan finally purchased close to 130,000T of US, Canadian and Australian wheat. Egypt said they will change their pricing methodology for the subsided local purchase program, to avoid illegal imports and arbitrages. The price received by local farmers will be likely to be lower, reducing probably the appetite of domestic production and increasing the import needs. Iraq has made no purchase, but taking into account the climate, this is no surprise.


EURUSD still in the 1.08’s December will certainly be the volatile month, by the meantime, the good old range 1.08/1.11 could be in action.

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