Tuesday reversal as far as Wheat and Corn were concerned, while Soybeans continued to go down. Soybeans finished down -4 to 16 cents after trading sideways, finishing well off from their highs. Wheat rebounded after the night session and traded higher, finishing +3 cents in Chicago and the movement lacked of conviction in Kansas and Minneapolis, respectively finishing roughly up +0.75 cents and down -1.50 cents. Funds sold 1,000 lots of Corn, 5,000 lots of Soybeans and 3,000 lots of Wheat. MATIF followed day session in Chicago and was also helped by a weakening euro. MATIF finished up +€0.75. But nothing much to say really, we’re in the period where market is itching to see the crops entering in the silos in the northern hemisphere, wheat don’t need rain now, market is also looking at the end of plantings on corn and soybeans and after,… So there’s a bit of a nervous range but no real fundamental news. Night session is green across the board, but nothing major just yet, Soybeans are leading the way with +4 cents, Wheat up in excess of +1 cent and Corn just ticking up. MATIF should also tick up at the opening.
Algeria tender deadline for the durum is today. They did it! Jordan finally bought 100,000T of hard wheat, $202, October shipment, from Germany, Hungary, Ukraine and Kazakhstan. It’s said Ameropa has sniped the tender. Taiwan MFIF bought 65,000T of US corn at a premium of 104.99 cents per bushels over Chicago Z6 (on Z6 at 403c/b, it’s $200/T CNF), seller is thought to be Cargill. Japan still seeks 125,049T of food wheat. USDA announced a sale of soybeans new crop of 140kT to an unknown destination.
Qatar energy minister said OPEC needs at least a price of $65. While he defined the level as ‘fair’, he said it would allow the industry to invest. Meanwhile, NYMEX Crude and ICE Brent are approaching $50, they are a bit more than half a dollar away. They are helped by strong US dollar but also supply disruptions in Canada, Nigeria, Libya and France. In France, Total is experiencing issues: 5 of their 8 refineries are blocked by workers unions, when riot police is coming to dislodge them, well, actually refinery workers are in strike, so it doesn’t change anything really,… The situation is especially critical in Normandy where there is fuel supply and logistic issues all around the main ports of Le Havre and Rouen. There’s probably a bit of sweat in a couple of trading houses about the Moroccan shipments: in Rouen, 3 vessels are waiting and 4 are loading. They need to receive bunker and have the bill of landing dated no later than the 30th of May, one day delay will cost 30%… Two vessels are also waiting in Dunkirk (and 1 is loading), where the situation seems less preoccupying. France is said to have begun to pump into its strategic reserves and the situation is allegedly costing Total several million per day. In Singapore, oil tankers are parking at a high pace. There’s a lot of floating storage going on and vessels are now loaded with 47.7M barrels, up +10% from last week. Meanwhile, Freight Index BADI, Baltic Dry Index, moved down -6 to 618.
In Brazil… We won’t get fooled again? “Meet the new boss… Same as the old boss!” After the Pertrobras scandal that lead to the impeachment of the President Dilma Rousseff, interim government is also in trouble on another corruption scandal. Not oil, everyone has its specialty, steelmakers this time… However, Brazilian real has not been massively volatile over the next few weeks and USDBRL kept ranging around 3.5. On the EURUSD side, US dollar is getting stronger, EURUSD is now back below 1.1150. German ZEW was far below expectations to 6.4 which has probably contributed to weight on the euro. Market is waiting for the June’s FED meeting quite impatiently, with strong expectations of a hike.
On the corporate news, Mosanto said Bayer offer ($62 billion, $122 per share) was not enough. In after-hours trading, Mosanto share is trading just above $110, so market seems to think it’s enough, but Bayer will surely adjust its offer before thinking about doing an hostile operation.