Funds sold 4,000 lots of Corn, 5,000 lots of Soybeans and 5,000 lots of Wheat yesterday, it was the cut off for the CFTC’s COT: on Friday night a very short COT is to expect once again. Despite the traditional short covering threat on the first bullish catalyst, a bit of boredom can happen. Funds are short, in the money, even if they have no reason to turn bullish, they could just feel bored of being short and take their profit and start from a blank page with new ideas. But as long as market is printing decent losses, the money keeps on entering, so no reason to get bored. Indeed, yesterday again, market started on a shy but positive note and the early bullishness vanished and market finished red across the board with decent loss on Wheat (around -1.5%). MATIF was no exception and continued to dig its hole. It’s reported farmers in France are borrowing cash to finance their cash flow instead of selling wheat, there will be a lot of carry over to the next marketing year. But should price continue to collapse, it will be potentially very damaging…
So basically a pretty dull market in terms of crop fundamentals. the next market mover is going to be either the weather (but nothing to worry about so far), the USDA WASDE report, or the quarterly stocks and planting report. WASDE report next week, is not expected to be a massive market mover. But US exports could bring some surprise, but there’s a bit of buffer on Australian wheat and Brazilian soybeans.
Night session very quiet, small green across the board. MATIF could tick lower but nothing major is to expect as long as EURUSD is in negative territory and US markets higher. But a lot can change during the days as demonstrated the past couple of sessions.
GASC is back in tendering wheat. We’ll see if confidence is coming back: will we see more offers? Will we see lower premiums? However, GASC is really lucky to experience these kind of problem in the current market. Even if they have to pay a premium, from July 2014 to February 2015 they paid between $248 and $260 CNF. Between July 2015 and February 2016, they paid between $210 and $189.44. So this is so far a very good year. Jordan has cancelled the tender. Three participants dare to show up but price were probably not good enough.
EURUSD is not moving at all, trying to go on the down side but there’s a lack of conviction. Stock Markets were in a good shape on better than expected ISM Manufacturing in the US but it fails to push US dollar higher. GBP calmed down but for sure volatility, one way or another, will come back pretty soon, 100ish days of it!
Gold is still battling with $1,230 per ounce. Gold did +5.40% in January and +9.50% in February. Best starting commodities… Meanwhile, WTI did -9% and -2.70%, NatGas did -2% and -22.50%… Kondratieff winter cycle? On Freight, Baltic Dry Index BADI continues its slow recovery and is now at 332.