No big change over the week actually. Soybeans were up +0.63%, Corn +1.88% and Wheat +0.93% (Minneapolis and Kansas were stronger, respectively +2.87% and +1.70%). MATIF was on the downside, -2.50% and -1.94% respectively for Corn and Milling Wheat in euro and even more in US dollars as EURUSD was -1.12% over the week. On Friday, it was a quiet session, funds were even on Corn and sold 3,000 lots of Wheat and 3,000 lots of Soybeans. Wheat finished down in Chicago and Up in Kansan and Minneapolis but with no major move. Corn was slightly up and Soybeans barely ticking down. Not a massively exciting Friday indeed. MATIF Wheat was also down, a bit of pressure brought by the lack of French offers in the GASC tender and a higher EURUSD. Night session in the US is stronger, a bit of short covering is expectable for Corn at least and Soybeans are still pushed higher by logistic issues in Brazil.


US export sales on Friday were in line with expectations for Wheat and Beans (respectively 307.9kT and 595.7kT) but very good for Corn: 1,297.9kT.
CFTC’s COT showed again a big Corn sell off from funds! They sold more than 35,000 lots over the week ending on Tuesday. Wheat was on the sells side also but only for a bit more than 3,000 lots. Soybeans have been short covering close to 25,000 lots. Cumulated short is now 265,695 lots short. From Wednesday to Friday, no big change, funds are estimated to have sold 4,000 Wheat, 1,000 Soybeans and bought 3,000 Corn.


It’s mild in the US, a nice feeling of spring. Yes, but… HRW is reported getting out of dormancy and it’s a bit early, 8 to 12 weeks early. This is not an issue by itself by any means, and could lead to a very early crop if spring rains are good. However, wheat will be exposed to freeze damage and need soil moisture. If mild temperatures are persisting with enough rain this is going to be great! But if there’s a cold snap, mind the winter kill! Still on the weather side, there’s some good rains in Brazil and Argentina, although some floods are reported, it seems to be pretty minor. Overall good weather in Brazil last week have helped soybeans harvest to proceed. There’s no real risk of freeze for the next two weeks in Europe and Black Sea.


GASC had no choice on Friday but book. Supply was beginning to be tight, only until mid to end of May. So they finally shot first and had to pay the risk premium (on ergot and cash uncertainty) and bought four of the five offers. They bought 240,000T at an average of $193.91 CNF. The French 60kT cargo from Soufflet was the most competitive both FOB and CNF and GASC also bought Russian wheat (no other choice anyway). Egypt has now supply to last until June. So they will come back to the market soon and the scaremongering about this alleged 3MT deal has not worked (yet?).


Ethiopia is tendering to buy 70kT of milling wheat. SovEcon said in February exports from Russia will reach a record of 2.2MT of grains (including 1.5MT of Wheat), the weakness of Russian ruble is clearly helping. July to Feb exports might then be 25.2MT, a record. Meanwhile, no news from the export tax.


Main currency event is obviously the Brexit. It’s fair to say David Cameron has not come back as humiliated from Brussel has he could have been, but it seems that the deal itself is now forgotten and almost irrelevant to what’s going to happen next. It’s unlikely the deal will fundamentally make move from one side to another the British politicians, regardless of the deal, the mind was already set. It’s naïve to think the British MP would have campaigned to leave. So deal is supposed to bring the best of both worlds to the UK. According to Cameron, thanks to the deal, UK would “never join the Euro, never be part of its bailouts, never join a European army or a European superstate”. The deal limits benefits for migrants, protects the City of London and excludes Britain from ever closer union. But no veto and no treaty change. And Nigel Farage has been pointing this, saying the Prime Minister was “dishonest” to call the deal “legally binding”. He’s claiming the deal is obviously missing the most important thing: control of borders, possibility for the UK to make its own laws, etc,… Usual stuff from the UKIP’s leader. The British MP said every Tory, even Ministers, are free to choose their side but on the other side, he just appealed to Boris Johnson not to join the Brexit camp (trying to imply that would make him friend with Nigel Farage and George Galloway), also, at least six Ministers will campaign to leave (it’s going to be messy). David Cameron already said he would not resign, whether he’d be pushed to it by its party is another story but Boris Johnson is certainly making a political move indeed by choosing to campaign in favor of Brexit. He said once “my chances of being PM are about as good as the chances of finding Elvis on Mars, or me being reincarnated as an olive” but for sure he begins to believe in miracles! He has nothing to lose really, he’s not a minister, he’s safe on is parliament seat until 2020, he’s not in the run to renew his London mayorship (in May 2016) so nothing to lose if Britain choose to stay in the UK, and if Brexit go through, pretty sure he’ll be in an ambuscade ready to take over the PM job or at least a Minister job. Another interesting political move is up north in Scotland. FM Nicola Surgeon is a bit confused. Basically, what she wants is being in the EU but without the UK, it would have been an easier position is David Cameron had chosen to campaign in favor to leave the EU, then she’d be in favour of staying in the EU. Here she has no choice but being on the Cameron’s side. The Telegraph is raising the idea of a double machiavellian bluff:  “Ms Sturgeon is said to have lots of fans in England but she should remember it was the idea of her sharing power with Ed Milliband that convinced many English voters to put Cameron into 10 Downing Street last year. So, if she says ‘Stay’, won’t some, in that case, vote ‘Leave’ on June 23” said Alan Cochrane in the paper. For sure, interesting time ahead. But for sure, EU will be damaged for obvious reason if Britain is choosing to leave but also if the Brexit is rejected: it creates a precedent for other countries… Answer on the 23rd of June! EURUSD down back below 1.11 and GBPUSD hammered -1.38% in early trading this Monday.


On Freight, Baltic Dry Index BADI is still rebounding, it’s now to 315, +25 since the historical lows. Oil is rebounding almost +2.5% on better US oil rig counts but still have a $30 handle.

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