Finally the day ended up in a pretty big sell off across the board, a bloodbath: ICE Canola -1.99%, MATIF Rapeseed -0.56%, CME Soybeans -1.36%, CME SoyMeal -0.42%, CME Soyoil -2.38%, CME Corn -1.5%, CME Wheat -2.40%, Kansas Wheat -1.71%, Minneapolis Wheat -1.52%, MATIF Wheat -1.96%… Fund sold a nice amount of futures: 16,000 Corn, 13,000 Soybeans and 7,000 Wheat. For a day with no fundamental event, this is pretty good! But with no real immediate concern on weather and current balance sheet, it’s tough to find a catalyst to a clear and durable rebound.
A sell off in the energy complex surely helped to trigger this sell of: Crude was -4.61%, Brent -4.06%, Heating Oil -3.21%, Gasoline -4.69% and NatGas -1.98%. Saudi ruled out a production cut, unless more countries are joining the freeze. In other words, situation is still the same, no one wants to make the first move and taking out of business shale gas operators in the US with low oil prices seems to be the priority… Talking about the US, Crude oil inventories are expected later today to hit a new record.
Also in the news helping the selloff, China is going to restrict Canadian canola imports by basically toughening the specs. But on the other side, crushing is doing well and is 12% above last season so far, exports are also doing well, more or less 20% better than last season.
The commodity of the day was definitely Sugar, Brown Sugar in New-York was +10.63% and London White Sugar +5.98%. There’s some low supply concerns in a heavy demand environment. ISO raised the sugar deficit forecast to 5MT (+1.5MT from previous estimates) and DatAgro also raised it to 4.37MT (+0.5MT versus previous estimates). It pushed remaining short to short cover, funds probably drastically increased their overall long, triggering stops and market was on fire.
Night session is still red across the board, MATIF has opened down as well. Only Soymeal is keeping the head out of the water. Worrying for MATIF, a lower EURUSD doesn’t seem to help, it fails providing support indeed.
In Europe, Corn imports begin to be a bit too much to the commission taste. There’s some talks about raising the tax to avoid cheap corn from black sea to invade Europe before next crop. UkrAgroConsult sees wheat next crop to 17.3MT only, this is -7.5MT compared to last crop but corn is seen +1.5MT to 24.5MT.
Algeria is tendering to buy Durum. Meanwhile, in Maghreb, concern about soil moisture is growing: there was a clear deficit of rain during the winter. Buenos Aires Exchanged raised again the planted surfaces for corn to 3.3M hectares, we’ll see if their 25MT estimates is actually closer to USDA’s estimates of 27MT.
EURUSD is down (now below 1.10), as well as GPBUSD. Tough ride these days with Brexit and not very good economic stats.