With last week movements (on position and prices), it was expected market to wake up in a bumpy mood. CFTC’s was all over the place, Soybeans have been up +4.28% over the week, +8.11% on SoyMeal, +4.49% on Corn, -0.11% on Wheat but -1.94% on MATIF Wheat in euro. So that was some kind of ride last week. And wheat was the driver of yesterday’s session. Closing up +14 cents. Short covering mostly, Corn was dragged up much less significantly while Soybeans ticked down, they probably needed a breather from the last week move.


Wheat rebound has been fueled by CFTC’s COT. Indeed, the weekly sum of Reuters estimates was forecasting funds sold 8,500 lots, they actually sold 38,425 lots (increasing by the meantime their short position to 106,163 lots) and there was some obvious short covering. The last CFTC was all over the place, funds reduced short on Corn to 136,705 lots (buying 25,160 lots) and increase long on Soybeans to 100,216 lots (buying 26,475 lots). As of yesterday night, it’s now estimated the cumulated funds short position on Wheat, Corn and Soybeans is now only 41,000 lots… But with quite some spreads between the products!


Funds were buying indeed everywhere yesterday: they bought 12,000 lots of Corn, 2,000 lots of Soybeans and 10,000 lots of Wheat. So it’s mostly a short covering action with no fundamental basis. US dry conditions is expanding but this is very moderate and this is still much better than last year. Wheat condition is also better: 57% of G/E, this is +1% versus last week and +13% versus last year. So there was nothing really fundamental to justify this rebound, but technical, seasonality and short covering were leading the sentiment.


Night session is quiet, Wheat is ticking down, Corn ticking up but there’s nothing significant. Soybeans are up more significantly. The focus is still on South American weather.


Still in ratings, French wheat condition is still very good, 92% of G/E, 38% is at the 2 node stage, this is double than last year. In other words, we’re still talking about 12 to 15 days of advance. Bloomberg survey showed expectations are between 40.23MT and 43.9MT. MATIF rebound was likely technical and following Chicago then. It could continue to go up, it’s compliant with the season, but if France is outputting again more than 40MT of Wheat, this might be very damaging.


Export inspections were actually good! Wheat was better than expected to 457kT but this is still not enough, wheat needs 496.9kT for the next 7 weeks, this is going to be a tough challenge. Corn needed to be above the million tons and did it (1.089MT). 20 weeks to go and 20MT to go more or less, this will also going to be a tough one. Soybeans seems to have kicked off their lower seasonality pattern and did just above what was needed to 257kT. There is still significant risk that neither corn nor wheat US exports will reach USDA expectations.


Reuters reported Algeria bought 200,000T of Durum between $272 and $273. Ethiopia is back on the market seeking 60,000T of Wheat.


Crude Oil still have a $40 handle despite the fact talks about the freeze in Doha failed. There’s a strike in Kuwait having an impact on their production, which is compensating the bearish side of fundamentals. Saudi said they’d be ready to compensate the flow if needed so not sure this is actually very bullish should it last just a few days. On Freight, Baltic Dry Index keeps rebounding, +37.87% YTD and +127.24% since the historical lows! Gold is rebounding today but is still below $1,240.


EURUSD is slightly stronger above 1.13. Market is awaiting for the next fundamental event but US dollar weakness seems to be the mood by default.

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