Markets were down overall yesterday, with still a lot of intermarket spread action. Soybeans were down -7 cents but Corn was mostly unchanged, the front of the curve ticking higher and the back month ticking lower. Acres switches and start of speculations on the corn yield. The US acres switches will be marginal and anything north of 160 bushels per acre will be good enough for Corn. Wheat on its side was down, there is nothing fundamental to support Wheat and rebounds are just the sheep following the herd. Same on the MATIF side, thin volumes, small down. Nothing massively exciting. Funds bought 11,000 lots of Corn and sold 5,000 lots of Soybeans as well as 2,000 lots of Wheat.
Night session is more frankly down collectively across the board. Soybeans and Wheat down -5 cents ish, Corn -3 cents ish and MATIF down a bit more than -1€.
It’s getting warmer in the US and dryer. It’s actually pretty welcomed for the plantings. Still on the weather side, due to the recent floods, Argentinian soybean exports could be hit by a cut of -25%, if it’s the case, this will be more than a million tonnes short of the 11.4MT expected by the USDA latest WASDE.
US exports sales later today, wheat is expected in the 200kT/650kT range, 1MT/1.6MT for corn and 350kT/750kT for soybeans.
US ethanol production was down -14,000 barrels per day to 948,000 barrels per day, this contributed to bring the stocks down by -149,000 barrels to 21.M barrels. So final demand was actually higher. It was not the case on the oil side: US Crude Oil inventories were expected off -3.1M barrles and they were actually up +1.3M barrels. NYMEX Crude probably gave up its chance to touch $50 this week (ICE Brent, trading at premium, have been very close, 15 cents shy of touching the magic number). Oil is down, both WTI and Brent have a $47 handle. Back to the Ethanol, EPA is proposing to increase the Ethanol incorporation by +4% in 2017. Ethanol futures, on the CBOT touched a six month high.
In France, there are some truckers strikes (who knows what they are striking for, striking is a French Olympic sport…). If their favorite target is more the oil industry, there could be some logistic disruptions on the agricultural side. But nothing to get panicked at the moment.
Still in France, this 40kT cargo of French corn in Egypt is still a mystery… No one knows or no one want to admit they know. Is it a pipe dream? No, the vessel is actually lining up. Persistent and cross checked rumors are pointing towards InVivo but it seems they are not keen on disclosing the price. It would suggest price was very low. It’s the first bulk shipment since more than 15 years and will be loaded from Bordeaux. Meanwhile in Egypt, Louis Dreyfus is looking to invest in Egyptian ports (story doesn’t say if it will be financed by the selling of the Olympique de Marseille football club!).
In Russia, Agriculture Minister sees grains crop to 104.8MT. By the meantime, COFCO said they will import 1MT to 2MT of Russian Wheat and this could grow to 5MT within the next few years.
South Korea MFG did not make any purchase in its corn tender as prices were seen as too high. Best offer was $195.85 CNF for mid-August and $196.64 CNF for the end of August. Philippine private buyers bought 150kT of feed wheat, optional origin but likely from Black Sea and EU. Japan bought 121,357T of food wheat, as usual from US, Canada and Australia. Finally, Iraq officially said they made no purchase on their tender. Meanwhile, Thailand has sold 1.17MT of rice state’s reserves.
Gold is feeling the pressure of the higher US dollar and is back just above $1,250 per ounce. Baltic Dry Index BADI fell just -1 yesterday, these days, it is really driven by Capesize Index, up +30 yesterday.
EURUSD is still feeling the pressure and is currently trading just above 1.12. The expectations of a June rate hike (obviously on the FED side) were vanishing and are now coming back in force as the FOMC minutes suggested. GBPUSD is still stronger, unemployment rate is holding at 5.1% and retails sales were up +1.3%. GBPEUR cross rate is also strong on the stay momentum in the Brexit campaign. To follow later today US unemployment claims. And the start of the G7 meeting.