Market rebounded during the session but the rebound lacked some steam and while Wheat managed to stay on the upside (just), Corn and Soybeans closed lower. One of the main fear was the level of shorts, but so far, no big player got a fright and there was no major short covering. End of month rolls and rebalance were affectless and no magic leap year black swan event (back in four years!). Funds were actually, at the end of the day, net seller on Corn and Soybeans (respectively 7,000 lots and 4,000 lots) while they were even on Wheat.


Night session is mainly on the green side, MATIF is expected to tick down, but it’s still early.


On one side, international demand was good and has brought a bit of bids, but on the other side, it’s still a heavily supplied environment with lower demand. Indeed, lower prices are triggering demand but this is not new demand by any means. If we look at Saudi’s tender, it can look big and exciting but year on year, they are more or less -15% behind in terms of quantity so this is not new demand. Filling the gap could be difficult also.


Weather wise, still nothing really. Australia is confident after a strong El Niño ABARES sees next year’s production of wheat, cotton and milk higher. Indeed, statistically, after a strong El Niño, the likelihood of a second strong event is really low.


US Export inspection were in line with market expectations… In other words, still as depressing as expected on Corn and Wheat. Wheat needed to reach 478kT to be on the average that would, in utopia world, fill the gap and reach USDA’s expectations. It fell quite short of this, to 372kT, wheat need now to average 484.5kT for the next 13 weeks. Similarly, on corn, 1,033kT was needed and also, gap keeps increasing. Indeed, it fell at 737kT this week, bringing the average needed to 1,044.3kT per week for the next 26 weeks. It’s tough to see how USDA can avoid to reduce US exports in the next couple of WASDE reports. Soybeans were still strong, to 1,049kT, way above what is required (sub 300kT would be fine).


In Russia, Agriculture Minister is saying that there’s no reason to revise export tax on wheat. In China state corn prices are expected anytime soon, before planting kicks off. It’s widely expected to be cut, worst estimates is -600 CNY to 1,400 CNY (roughly $215/T).


Thailand is seeking 256,600T of feed wheat. Algeria purchased “at least”  280,000T of durum, price thought to be between $250 and $253 and origin most likely Mexico. But it could be up to 400,000T of durum that OAIC bought, with a bit of Canadian origin in the mix. Saudi bought 870,000T of hard wheat at $188.22 CNF average: 575,000T to Jeddah (187.57 CNF average), 240,000T to Dammam ($190.10 CNF average) and 55,000T to Jazan ($186.78 CNF). Iraq is still seeking wheat and issued a tender of 30,000T for rice. Malawi will need 50,000T of corn due to drought.


EURUSD was down yesterday, EU CPI fell below expectations. But a bit of a respite for the GBP yesterday and also today. Brexit campaign is still very entertaining, especially looking at it with a British point of view. “Danger”, “threat”, “uncertainty”, “warning”, “terrible blow”… Press is unanimous, doom and gloom if the UK leaves the EU. British government (well at least the PM because his government is not even unanimous and a such important matter, probably a major political mistake here) has the press indeed on its side but also the G20. Actually it’s said that David Cameron and George Osborne (the Chancellor of the Exchequer) put pressure on the G20 to add it’s touch of scaremongering into equation. The Guardian reported UK officials “instigated G20 Brexit warning”: “You can’t be serious?!?!”. Need to go down under to get a bit of interesting ideas and point of view: nice piece indeed in the Australian Broadcasting Corporation (ABC) opinion pages. “A growing number of Britons perceive an incompatibility between EU membership and Britain’s parliamentary institutions” and it’s going against their fundamental culture as the Parliament acted as a safeguard against the Crown during the 17th and 18th Century. EU was created and evolved to fix problems that were not completely relevant to Britain and it seems it’s currently reaching a tipping point, a point of non-return with a bit of nostalgia. And it seems that a Brexit is becoming less and less unthinkable…


Funds are buying gold, are they scare about something? The precious metal is now close to $1,240 per ounce. Oil is in a good shape with Saudi keen on talking to other producers about limiting the volatility, between $34 and $35. US Shale gas producers are said to be planning to come back massively if oil is getting to $40. On Freight, Baltic Dry Index BADI is on fire for the 12th consecutive session! Back to 329, up +39 from its historical lows but still down -149 points since last year.

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