Market will be closed in the US: President’s Day (formally Washington’s Birthday – George, not Denzel – born on 22nd February 1732). Weather is still ‘open’ though… It was dry and cold in the US wheat areas over the week-end, snow cover is still satisfactory. In Europe and Black Sea, it’s been pretty wet and mild, freezing cold only happened in the northern parts of Russia where snow cover is adequate. North Africa received some rains also. In South America, finally it’s dry where it’s supposed to be and wet where it’s supposed to be. So no weather issue. It’s still early to assess the next crop but more and more it seems that if there’s no late winter freezing, northern hemisphere crops are going to be early and in good condition entering the spring.


MATIF will be opened to day, lower volume to expect and with lower USD and the current strength, it’s tough to see market going down sharply today. Market is expected to tick higher at the opening. The short covering after a few session of panic may continue indeed, but overall, situation is still depressing. High supply, lower demand, high stocks.


On the GASC tender from Saturday, drama has been dragged well into Sunday. And finally, GASC said they cancel the tender because prices were not suitable. Egypt has stocks until probably no later than the end of May so something has to be done pretty quickly now. We’ll see if this 3MT deal with an undisclosed government (most probably Russia) is landed or if there’s new tenders this week. But if this deal is not bluff by any mean, this would mean the GASC would buy only 1MT of wheat through tender, a few cash basis are going to suffer, especially in France.


Talking about France, in center west areas, it’s been reported some rapeseed is flowering already, this is very early, some farmers said they have actually never seen rapeseed showing flowers that early in February. This is not bad by any means and could lead to a very early crop but mind the freeze for a few weeks…


Bad news are coming from Japan, it’s becoming difficult to imagine the negative rate policy is going to solve the deep problems. Quarterly GDP fell lower than the expectations contracting by -0.4% (-0.3% was expected), this is -1.4% annualized. GDP deflator fell also short of expectations to +1.5% (+1.6% was expected). It’s been three quarters in a row Japan’s economy is contracting. Also, the monthly industrial production has been revised to -1.7% (-1.3% was expected) and monthly tertiary industry activity was down -0.6% (it was expected at +0.1%). So pretty bad but financial markets seems to feel there’s no sign of a uncontrollable spiral just yet: Nikkei went up +7.16%. Yen is softer though, USDJPY is currently trading up a bit more than +0.50%. Mario Draghi is speaking today, he most probably won’t close the door to a new round of QE in March as initially thought. Also this week let’s keep an eye on UK and US CPI, UK retail sales, German ZEW, US PPI, Philly FED Manufacturing Index, US unemployment claims, US crude oil inventories. These can bring a bit of volatility to EURUSD, softer this morning, back below the 1.12 level.


Crude oil has still a $29 handle and is softer this morning. Will rebound sustain? Indeed, the UAE energy minister basically said he’d be ready to cut production with OPEC but he also said they won’t have to do it as non-OPEC production will go down and market will regulate itself. So most likely market got slightly over excited about the news and financial markets also rebounded on Friday in conjunction with the oil rebound. Gold Still above $1,200 per ounce.

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