Pretty nice sell off yesterday. Traders probably focused on fundamentals: good winter crop conditions in the US, heavy fundamentals (although it’s old news), Argentinian expected move on export taxes and Peso devaluation, short funds appealing more followers to short,… Nothing else really. Funnily like sometimes bigger moves have fewer news than ranging markets! Corn followed wheat lower while the bad boy was soybeans this time. Slightly up on short covering but nothing major really. Weather forecast are pretty good in the US, snow is coming and will hopefully provide a nice cover and protection to winter crops. Fund sold 8,000 corn, 7,000 wheat and were flat on soybeans. MATIF followed Chicago lower but in a lower extent, resisting very well. Farmers aren’t selling just yet, betting on a tough winter and spring probably.
Apart from good weather in the US, South American weather is favorable as well and soil moisture is coming back. No more news coming from Black Sea where spring will be important: rain will be needed for wheat but more spring crops will be planted to compensate the loss of winter wheat surfaces: UkrAgroConsult sees corn crop to 25.8MT in 2016, +2.8MT, on surfaces increase. Back in South America, soybeans are 66% planted (+10% from last week), still slightly lagging from last year (-8%) and the average (-12%).
Night session is up a couple of cents across the board, taking a breather after yesterday and MATIF has opened on mostly flattish.
Two digits down in Chicago was a strong clue… GASC is back! Shipment second half of Dec. This will be interesting for French wheat as over the holiday period logistic is more complicated, on the other sides, silos are full but also, the temptation to index it to H6 prices rather than Z5 with the justification that Z5 will be out of the picture when shipment start is pretty big. But we’ll see, French need to sell so for sure I’s going to be an interesting competition with Russian wheat!
Jordan cancels a wheat tender. Again and again!
EURUSD is failing to go down further so far, did FED’ Yellen throw doubt on the rate hike? She said “a cautious approach” is needed when talking about rising rates… Can’t wait for December! USDARS touched is high ever (meaning Peso’s low against US dollar) to 9.6727. Crude Oil (both WTI and Brent) jumped 2% on Russia flying over Turkey for 17 seconds and subsequently seeing the jet taken down… Economic sanctions are beginning to come from Russia and turkey imports from Turkey have been banned (no, this is not a sarcastic Russian Thanksgiving pun).