Funds got a little fright at their position on Corn, a bit too short and indeed, after this long week end, they rushed on the buy side for Corn, funds bought 10,000 lots of Corn and market finished up 1.25%. Also they bought some Soybean, following Corn for sure but also on the Argentinian news relaxing the imports of beans: they bought 4,000 lots. Wheat have been trading sideways and finished the session as it started it: on a small lower touch, funds having bought 1,000 lots. Eventless day on MATIF, pretty boring, expected to open on the red side today following US markets and higher EURUSD. 

Night session is on the down side across the board indeed, reversal Tuesday for corn and soybeans? Wheat has no real reason to find some upside and all the rebounds are finding some selling interest. The only bullishness is coming from the cold temperatures, mild temperatures of last week have reduced the snow cover but wheat is a tough weed.

 

Informa raised its 2016 soybeans planting in the US to 85.23M acres, +0.693M acres from their latest estimates, they marginally decreased corn plantings to 88.869M acres, -0.057M acres. The arbitrage between the both will be most probably price driven. So are we heading to more spring plantings and will we erase the bullish news of winter wheat planting? Agroconsult cut the Brazil soybean crop to 99.2MT (-1.4MT) and the first corn to 27.9MT (-0.6MT) and the second crop to 57.7MT (-0.3MT).

 

US export inspections were as expected for corn (581kT) and wheat (341kT) but topped expectations for soybeans (1,395kT). Important facts about this, wheat has to average 467.3kT for the next 19 weeks, else, USDA’s target won’t be reached and exports would have to be decreased. This scenario is very likely to happen now. Iran said yesterday that main providers or wheat will stay Germany, Russia and Kazakhstan, US being too far away, so no help will be found on this side. Same for corn, 986.2kT is needed every week, there’s a bit more time though, 33 weeks. Only soybeans exports are in a comfortable situation, they need to average 471.8kT per week, they’ve reach 66.15% of the USDA’s target while only 37% of the marketing year has elapsed.

 

Coming back to Iran, they’re complaining storage is too expensive, they have currently 5MT in silos and are considering cutting it by 2MT, 3MT being sufficient for food security. South African authorities seems to think soaring local prices are not only due to the drought (USDA cut it from 12MT to 8MT) but they think there’s some market manipulation and they have launched an investigation. Prices in Rand more or less doubled in a year. Russian Ruble is above 79.90 (RUB for 1 USD), seems like it’s attracted by the pretty level of 80! This is likely to leave no other choice but to ditch the export tax or at least reduce it significantly. South Korea bought 55,000T of Argentinian wheat. Deadline today of Jordan hard wheat tender, will it be cancelled?

 

EURUSD on a rebound, now trading in the middle of 1.09 and 1.10. There’s n reason to see it stop ranging between 1.07 and 1.10.

 

Baltic Dry Index keep sinking, new, new, [….], new, historical low to 363, -24.06% since the beginning of the year. Financial markets in Asia are back on the downside today. Close to -4% in Hong Kong and Japan, -1% in China… Crude oil is showing a $27 handle… Macro is not massively appealing…

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