Today is the day… Most probably a ticking bomb for currency market as a non-hike would be a surprise (last time market took more or less 200 pips on the announcement) and a hike would probably see some downside expected. Indeed, current rebound as been fueled by doubt. Some analysts change their mind, like horses refusing the obstacle! Indeed, implied probability of the hike is 76%, compared to more than 90% a few weeks ago, so let’s thrill for a few more hours… 2pm US Eastern Time. Crude oil (WTI) rebounded 3% yesterday, $35 was a good support it appears. Interesting also, the spread between WTI and Brent is decreasing drastically, it’s now close to 0 (on the negative side, WTI is still cheaper), it was close to -$13 earlier this year.
Back to ags. There’s not a lot of crop news these days, market mover could only be a cold snap in northern hemisphere (but it’s not forecasted anytime soon) or funds covering their short to go in holyday with a lighter book…
NOPA crush was below expectations. Market was waiting for another record, that was a bit greedy to be honest. Only 156.134M bushels of soybeans were crushed in November 2015 (161.7M bushels were expected), compared to 158.9M bushels in October and 161.2M bushels in November 2014. So instead of a record it was the worst November since 4 years. SoyOil stocks were above expectations to 1.477 billion bushels, so this is supposed to be bearish, lower production and higher stocks. There’s a few weeks where market is really cheering about Chinse demand and some other is worried. Market is in a worrying mood this time indeed. Market closed understandably under pressure yesterday, almost -1% down. The whole Chicago soy complex followed and in general, other oilseeds were red also across the board yesterday (ICE Canola, MATIF Rapeseed, NCDEX Mustardseed). Funds sold yesterday -7,000 soybeans, -4,000 soymeal and -8,500 soyoil. Brazil planting are almost done, 89% of beans are planted, 8% behind last year but this is not worrying by any means.
Weird day for wheat, traded sideways yesterday. Very technical and Chicago was not in the spotlight. Kansas and Minneapolis has been lifter more significantly at the end of the session, while Chicago closed way from the highs (funds bought 2,000 lots in Chicago). MATIF was pushed up on lower EURUSD. Market are still very macro focused. It’s December time, end of year, General Meetings of Coops are coming and they seems to give the underlying message that farmers should sell, waiting for higher prices considering the S&D is maybe greedy. They actually seem worried, and cash basis are likely to go down if winter is not killing a lot of wheat. Especially with Russia expecting to export 3.4MT of grains in December. There was a small rebound of MATIF / CME spread, back to close to $13.
Corn was under pressure also on little news but favorable weather in South America. Funds sold -2,500 lots.
The night session was quiet, soybeans being small up, corn and wheat also. The start of the day was down for MATIF, the excitement of the yesterday’s close has faded quickly… More than -1% down with EURUSD marginally lower.
Syria is tendering for 200,000T of milling wheat. Tunisia for 100,000T of milling wheat and 50,000T of feed barley. On the milling wheat, it’s been reported best offer is $196.50 CNF (optional origin) and most of the offers are below $200. Holiday season will probably be quiet though Argentinian are expected to flood the export market anytime soon, will be interesting to see the effect on cash basis. Yesterday, ARS touched is lowest level to 9.8053, the trend is not expected to change anytime soon as the black market is more around 14.50! An official devaluation of 25% is expected by analysts.
COFCO is said to be willing to take the full ownership of Noble agribusiness.