Soybeans continued to sink yesterday, wheat was down as well… Still technical, a bit of book cleaning, readjustment, profit taking ahead of the report. Corn was slightly up, a bit of risk off on the corn shorts. Funds bought 1,000 clots of Corn, sold 1,000 lots of Wheat and sold 6,000 lots of Soybeans. Weather is good in South America, this might explain the pressure on Soybeans. The only weather concern so far is in northern hemisphere, wheat need to enter in dormancy and be covered by snow when freezing will arrive but so far, temperatures are higher than usual for the season.
MATIF continued to correct slightly more than Chicago , when it closed, spread was down to $15.52, but it’s slow, a quarter dollar per day… In Euro, MATIF went down, mainly pushed by higher Euro indeed. There’s no major news and fundamentals are heavy and prospect for the new crop as so far encouraging. That being said, there was obviously some good export activity, seen in the EU licenses and in the fact the threes exchange approved silos are now reopened. French customs said 1.11MT of soft wheat were exported in October, total 4.9MT for the season so far, -0.7MT compared to last year. This will likely to pick up in November but there’s a lot of delay to make up for.
A bit of reversal on the night session, Wheat and Soybeans taking a breather on the upside. Corn still slightly up as well. A quiet day to expect, market might wait the USDA report to get excited. MATIF could see some pressure on the opening as EURUSD continues to be stronger.
USDA WASDE day… December report is not usually a big report with big supply or demand swings. Minor changes expected in the US, Wheat and Corn ending stocks are expected to rise +0.2MT, and Soybeans to decline by -0.1MT. So virtually nothing there. Worldwide, pretty much the same, Corn are expected to go up +0.2MT, and Soybeans to decline -0.2MT. Main expected change will be Wheat, down -1MT. The wheat movement will be explained mainly by the Australian production (-2MT expected, to match Australia’s’ own estimates of 24MT), mainly compensated by Canada (+1.5MT). So really, minimal changes are expected. Will the market move be little? It’s a possibility indeed. However, one can argue with no new bearish news, market could short cover, or actually realize it’s still very heavy fundamental and dig further… yeah, let’s admit it, no clue, it’s like tossing a coin! There some potential surprise, it’s not really expected USDA will move (down) US wheat exports, Corn is expected to be brought slightly down (-0.2MT) as well as Soybeans (-0.4MT). So if there’s a surprise, it could come from there potentially. But surprises usually unlikely to happen in the December report.
Algeria’s tender today for Milling wheat. Jordan cancelled again the wheat tender (they probably did not receive any offer due to tough tenders terms) and reissued the same tender. It comes a day after Jordan announced an agreement of Wheat and Barley supply with the UAE.
EURUSD is showing up above 1.09 and seems to be willing to head towards 1.10 but trade is very nervous and bumpy. Market still expects FED to hike the rates next week so it’s likely to be battling for one more week… WTI Crude Oil was very bumpy yesterday and went to see multiple years low. Low on day was $36.64 on NYMEX F6 contracts, market recovered but seems now really keen on evolving below $40.