Funds bought 20,000 lots of Corn, 15,000 lots of Soybeans and 6,000 lots… So, reverse logic, USDA WASDE was bullish right?


US wheat balance sheet is heavier by +0.27MT, but this is due to lower feed, exports haven’t been changed. Not really surprising, this is a bit sneaky to be honest. Same on corn, they did not change the exports, they can get away with it considering the latest good export inspections but it is still expected they’ll decrease them. US Feed is decreased by -1.27MT, this is offset by higher ethanol use (+0.65MT), ending stocks are therefore higher +0.62MT. For US Soybeans, balance sheet is tighter as exports are raised +0.4MT. So small bearish for Wheat and Corn, but there’s some more bearish buffer in reserve (exports) and small bullish Soybeans as far as US is concerned but there’s nothing exciting. Worldwide, wheat balance sheet is heavier by +1.67MT. Mainly due to China lower use (-2.6MT) and offset with EU. EU balance sheet has been shaken, although the ending stopcocks are down only -0.83MT. Indeed, EU production is up +1.54MT and exports down -0.5MT and this is offset by higher use (+3.05MT). Corn ending stocks are up +1.94MT, we said US +0.62MT on ending stocks but also EU +0.41MT (lower use by -2MT offset by  lower production by -0.28MT, lower imports by 1MT and higher exports by +0.3MT) and a beginning stocks adjustment in Japan (+0.85MT). Soybeans ending stocks are up a little +0.15MT, South America ending stocks are +0.35MT), China ending stocks +0.85MT and this is offset by the mentioned US. Just a quick focus on South America. Brazilian wheat imports were decreased by -0.5MT and this was offset by -0.4MT lower use. On Corn, Argentina beginning stocks were adjusted by +1.1MT, production was bumped up +1MT to 28MT and this was offset by +2MT on the exports. No change on Brazil. For Soybeans, in Argentina production in up +0.5MT to 59MT. No change on Brazilian production, still pegged to 100MT but a higher beginning stocks (+0.449MT) and higher exports (+1.5MT) brought the ending stocks down by -1MT.


The least we can say, it’s not really massively bullish. Wheat has 32.62% of the production in stocks and 33.76% of the consumption. For corn it’s respectively 21.49% and 21.52%. For soybeans, this is respectively 24.68% and 24.98%. This is a very well supplied world and the likelihood of a next crop significant shortage is becoming lower and lower every week. But market finished up +10 cents on Soybeans, +6 cents on Corn and +4 cents on Wheat. MATIF was no exception and moved up +1.5MT.


Today France Agrimer will release the French balance sheet estimates. Rumor has it that 1MT of old crop production will disappear. It’s April, crop is in since more than 6 months so this is a bit farfetched and weird. Also hearing exports could be up +0.5MT. That being said, -1.5MT on the ending stocks (bringing them to 4.5MT) would not be a massive issue. First Bloomberg survey for new crop is 42.8MT, this would be a record once again… So yeah, you can squeeze by magic 1.5MT,this won’t solve France and EU’s oversupplying issue…


GASC Wheat tender began to bring a bit more traders on board but still nothing massively exciting. Indeed, only 7 offers. What was interesting was the only French offer, FOB $184.74. This is only -$1.05 from the 7th April tender’s best French FOB and -$1.5 from the same offering trader (Soufflet). MATIF in US dollar moved down -$1.93 by the meantime. In other words, price was not better than the previous time and French wheat was disqualified in fact, especially with a $11.10 freight. Premium to the GASC for French wheat is still very high, in excess of +$11 (for a lower moisture though, so let’s say +$9 to MATIF, while cash premium are still negative) and it strange to see French wheat not being more aggressive, much more aggressive, especially considering the fact there will be soon some needs to make a bit of rooms in silos. But hey, you don’t try you don’t get! This time, best FOB was from Ukraine to $184.41 but came only in the third place CNF due to the freight disadvantage compared to Romania ($13.09 versus $6.56). Therefore, Romanian wheat offered in 3rd and 4th FOB position (also behind French) to respectively $185.77 and $186.777 (both by Ameropa by the way) made it to best CNF. GASC then booked three cargoes, the two Romanian and the Ukrainian, leaving the French and Russian wheat aside. Total purchase this time: 175,000T at $192.12. There was a bit of bargain somewhere because it doesn’t add up to the average price offered. This time, it’s much more probable it was the last tender for old crop.


Jordan hasn’t been even unluckier and made no purchase. Most probably tender will be reissued to buy 100,000T of hard wheat. They just declared they might change the specs of the tender… Better sooner rather than later, this is one of the main issue they are facing indeed.


In Brazil, government is diching the 10% import tax on grains coming from outside the MerCoSur. China has imported 6.1MT of soybeans in March, this is a record March and this is +1.6MT from February. China may become less dependent on soybeans imports though as they are planning to increase surfaces and yields.


EURUSD is very technical, the area of 1.1350/1.1400 has been quite nervous but now it seems we’ll try the lower side of the 1.13’s. FED expectations and Brexit are still the main talks. In the UK, David Cameron has been bullied in the parliament and been called Dodgy Dave by a MP who has been sent off from the chamber in a typical British fashion. Anyway, timing of tax avoidance and optimization of the higher class in the UK is falling at a very bad moment. Meanwhile, Brexit camp is increasing its strength…


Oil has been volatile yesterday and rebound on a news that Saudi Arabia and Russia were to agree to a freeze in Doha. This is no news, they agree on the principle since January… Should everyone join! Which is still unlikely, especially on the Iran side. Anyway, Crude is back in the mid-$41 and Brent has a $43 handle. On Freight, Baltic Dry Index BADI is still increasing: +5 to 560.


Night session is green across the board in a continuation of the yesterday movement. Soybeans are up 12 cents, Corn 2.5 cents and wheat 3 cents. MATIF is expected to tick up also, helped by a softening EURUSD.

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