Night session is in the red across the board (nothing much actually, the only significant move are on Soybeans, -10 cents), a well-deserved break after another day where market finished up across the board, led once again by Soybeans. Yesterday, the MATIF followed US purely like a sheep as the soft wheat crop is now seen between 37MT and 41MT (40.86MT last year). Market will probably pretend for a while to be disappointed on not beating a new record but a 40MT crop is likely and even with unexpected Asian demand and North African demand (French ports loading confirmed it’s picking up as the new harvest is around the corner), it’s going to be another tough year for French wheat: it has to be competitive as there will be a lot of it. No exception, MATIF slightly down also this morning, following US markets. In the US, funds were on the buy side yesterday and bought 9,000 Corn, 10,000 Soybeans and 4,500 Wheat. There is no massive news around, market seems choppy but it’s actually ranging, it’s pretty quiet indeed in terms of news. The talks are still about the actual damage of Soybeans and Corn crops in South America, the overnight freeze in the US and the acres switching.
Nothing much to say about the weather, it’s good in south America, quite favorable in Europe and Black Sea, a bit fresh and dry in the US but there is no major concern anywhere.
Early May, Brazilian farmers had sold 16% to 17% of the new crop on Soybeans. This is a very heavy pace and it’s now probably even more as Brazil has exported 2.6MT of beans so far in May. Meanwhile, in Argentina, the corn harvest is finally pacing up to 51.3% (thanks to better weather) but is still far behind last year and this is impacting the shipments (more than 1MT delay). When the bulk will arrive, traffic jams in the ports are to be expected.
In Germany, wheat crop is now pegged to 25.57MT (-0.53MT from their previous estimates) according to Coops Association. Rapeseed arbitrage in the farms it seems. Indeed they now pegged the crop to 5.1MT (+0.6MT from previous estimates).
Bangladesh is seeking 50,000T of wheat, deadline 5th of June. Jordan made no purchase, as usual, and reissued the tender to buy 100,000T of hard wheat but they did manage to buy 100,000T of feed barley. South Korea NOFI bought an additional 70,000T of feed wheat, optional origin while Japan received no offer in the feed wheat and barley tender. Egypt has received offers on the Soy Oil tender, best one is $794. For Sunflower Oil, traders offered $857. Still in Egypt, a vessel is due to load 40,000T of Corn, this haven’t happen since years… Black Sea corn, preferred supplier, is reaching the end of the season indeed. Qatar Flour Mills are expecting to increase capacity and raise exports to Saudi Arabia.
On Freight, Baltic Dry Index BADI is slightly down to 642. These days, the index is all about the Capesize demand. Meanwhile, Oil is struggling to reach $50, NYMEX Crude is in the mid-$48’s and ICE Brent just above $49. Higher US dollar, lower gold. Gold is coming back down to $1,270 ish today.
EURUSD is back down below 1.13, there is still some uncertainty about the June rate hike from the FED. Market sees a summer hike. GBPUSD is rebounding (and obviously even more cross rate GBPEUR) as the latest polls saw the leave camp of Brexit struggling. But 55% of the Britons thinks that… “Well… Whatever… What different does it make?”.