After a such selloff a rebound was expectable. But the rebound was painful in a sense it really struggled to happen, trading was sideways but finally market closed on the positive note it started with. So a nice recovery from the USDA, especially on Wheat that was not the most bearish in term of movement from one report to another. Funds bought 10,000 corn, 3,000 soybeans and 4,000 wheat. Now, funds are mostly short on everything: -78,000 lots on Wheat, -66,000 lots on Corn, -60,000 lots on Soybeans, -3,000 lots on Soybean Meals, -5,000 lots on Soybean Oil, -7,000 lots on Canola. On fundamentals it make sense but one has to be careful, weather panic can trigger, whether it’s justified or not is another story, short covering. And we saw how fast it can go! RCG is pointing quite fairly that with the fundamental day out of the picture, market seems to struggle to keep going down. MATIF wheat followed Chicago higher yesterday, a bit of excitement on the second Egypt’s tender as French wheat was seen competitive… 

Is there still some margin on the downside? There is indeed no shortage of anything anywhere when you think about it. Corn has been holding very well for example. In Global Grains, David Hightower forecasted “historic lows” will be reached in grain markets over the next few months.


Quiet night session, small down on soybeans and corn, wheat up, MATIF is likely to have a stronger opening.


Double whammy! GASC came for more! 2 tenders in a row and it’s not the first time this season. There was a lot of bargaining apparently. Basically, Egypt’s GASC probably thought French traders were disappointed on Tuesday. Indeed, as FC Stone pointed ironically, 60% of the offers were French but 100% of the purchase were Black Sea (115kT on Tuesday). So this second tender was a clear message to French traders: “this is your second chance, do not disappoint us”. They partially didn’t. GASC purchased 120,000T, including a vessel of French wheat from Glencore at $211.50. The other vessel was Russian wheat at $211.77. Freight rates have decreased drastically from Russia, best offers were $7.07 from Novorossiysk and $7.88 from Tuapse. Compared to $10.91 from France, this is a huge disadvantage. Therefore, in FOB, 7 French offers were better than the first Russian! French was offered from $200.69 to $203.90 while Russia best FOB was $204! It means that either Russia don’t need to decrease the basis to be competitive, either the French need to discount more. So GASC this season has purchased 2.784MT, including 240,000T only of French wheat, only 8.6% of its supply. You don’t really chose the timing, especially when purchases is market price driven, but with traders gathering in Geneva for Global Grains and a public holidays in France yesterday, this was probably not the best timing but purchased quantity was quite small. And will French reduce their basis? Well, with Senalia – again – halting wheat receptions at Rouen because of a lack of space, that’s an option. What is an option as well, unfortunately, is spread manipulation of the Z5/H6 spread on the MATIF, other Exchanged approved silos operators have an open road to do what they want…


Busy day is South Korea: KFA is seeking for 60,000T of Corn, NOFI for 138,000T and 65,000T of feed wheat, and KCPIA 165,000T of corn. Japan bought 23,000T of feed wheat. Algeria’s OAIC wheat tender deadline is today… French traditionally is making it.


In South America, Brazil truckers strike will probably be reaching an end, fines, suspension of licenses and confiscation of trucks seems to be a good incentive for going back to work. Rosario Exchange said Argentina will harvest an estimated 20.2MT of Corn, -22% from last season. Meanwhile, farmers are still waiting (while sitting on their stockpile) for the election result and the hope of a lighter export tax.


EURUSD still just above 1.07, no massive news. Both Draghi and Yellen are speaking today, so this can create some mess. Chinese industrial production fell short of expectations to +5.6% (+5.8% was expected), UK unemployment was better an expected to 5.3% (5.4%was expected).

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