Very dull day until the report and not much more exciting after the report either. Funds sold 5,000 Corn, bought 5,000 Soybeans and 4,000 Wheat. When you live pretty far on the east (not too far though, else it’s becoming the west) of the US, it can sometimes worth staying awoken until late to enjoy the USDA’s WASDE show. On this occurrence, this was just a waste of time. Sounds like USDA guys were having a ski trip in the Rockies and could not be bother doing anything… Report is largely neutral, slightly bullish on minor adjustments but considering this reports includes more or less all the potential bullish news but no real bearish news just yet (and some will surely come in the next few months), market has been unimpressed. Soybeans closed up, Corn down and Wheat up, no major move though. MATIF followed on the upside also.


Balance sheet of US wheat stood unchanged. No change on exports. Worldwide, if UE crop is increased by +0.48MT, world production is down by -3.45MT to 732.30MT. Indeed, the move was more than offset by, wait or it,… Australia! Indeed, after several months of refusing to decrease the crop, USDA finally made the move, not quite aggressively though: -1.5MT to 24.5MT (half a million ton could disappear later, market is more working with a 24MT assumption). This kind of little detail where USDA seems to smooth the data is not really good for confidence in the data, especially when it comes from a quite transparent country. Quite opposite move on India, USDA is quite cautious on India and reduced the production by -2.41MT to 86.53MT. The Indian government said mid-February output would be 93.82MT. Morality, everyone has someone to be skeptical about! Lower production is offset by lower consumption, world feed consumption is down -1.6MT and non-feed is down by -0.39MT. It’s a bit scattered everywhere, no major move: -0.3Mt in feed consumption in Middle East, -0.4MT in North Africa, -0.3MT in South Asia and -0.2MT in Russia. On the export side, Argentina increased exports by 0.5MT, and Australia decreased by -1MT. No change on EU exports. Therefore, world ending stocks are down -1.28MT to 237.59MT, still 32.44% of the current production and 33.49% of the current use. There’s no shortage of wheat by any means. What to expect next? US exports and EU exports are to be monitored (on their downside potential), but it will be interesting to see when action is take: on the sly at the end of the marketing year or in April/May reports? So neutral to slightly bullish, but more bearish numbers are luring.


Balance sheet of US wheat stood unchanged. No change on exports. Worldwide, another adjustment of Brazil beginning stocks: -1.65MT on higher exports the season before. World production is down -0.44MT to 969.64MT, driven by another cut in South African corn crop: -0.5MT to 6.5MT, logically, their imports are also bumped up +0.5MT. No change of South American crops. No major change on the consumption side. Ending stocks are then down -1.84MT to 206.97MT, 21.35% of the production and 21.39% of the consumption. No shortage by any means. What to expect next? US exports will be decreased, no other choice. South American production have some upside potential. So neutral to slightly bullish, but more bearish numbers are luring.


Soybeans are the only move on US balance sheet: crush is down -0.28MT and ending stocks are up +0.28MT. Around the world, a bit of lower production scattered in non-major producers (-0.28MT to 320.51MT, well and actually -0.02MT in the US, quite marginal and this was exactly compensated by the same amount of lower non-crush consumption, so quite irrelevant). Lower crush in EU (-0.5MT) and Mexico (-0.2MT), higher crush in China (+1.1MT). Also higher crush in Argentina (+2.2MT) but partially offset by lower non-crush consumption (-0.91MT). Therefore, ending stocks are down -1.55MT to 78.87MT, still 24.63% of the production and 24.98% of the consumption. What to expect next? South American production have some upside potential. So neutral to slightly bullish, but more bearish numbers are luring.


Meanwhile, France AgriMer confirmed ending stocks will be 6MT… In the current century and millennium, it hasn’t happened! 17 years high indeed. Barley stocks were cut to 1.6MT (-0.15MT compared to previous estimate, mainly explained by higher exports), and corn stocks were also lowered by -0.1MT to 2.6MT on higher exports.


In other news, ethanol stocks jumped to a new all-time high despite a decline in production. Production was down 9,000 barrels per day to 978,000 barrels per day but stocks increased by +683,000 barrels to 23.31M barrels. It’s also noticeable that at the current production rate, stocks are 23.8 days of production, highest ratio since March 2013. Meanwhile, US crude oil inventories increased by 3.9M barrels. But there was decent demand for gasoline and fuel, so oil has not been negatively affected. Oil is still stuck in a $36/$38.50 range (Brent with a $40 handle) and is awaiting for the oil meeting in Moscow later this month. Nat Gas is rebounding also, with WTI at $40, a lot of shale gas operators will be competitive.


Gold is softer and back below $1,250. On Freight, Baltic Dry Index BADI is still on its bull run, +10 yesterday to 376.


Night session is red across the board but nothing major, market is kind of puzzled. There’s some bearish numbers still to come in the couple of next USDA WASDE but market is already quite short, so what to do? If it can be seen as tricky to get shorter, there’s on the other side no trigger to buy or short cover. MATIF is expected to be mostly unchanged at the opening.


EURUSD is down this morning, awaiting for the ECB (negative rate? More QE?) and US unemployment claims.

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