Nothing much really yesterday, same old news about the weather. US Drought Monitor shew that indeed, the soil is getting dry. Yes it’s dry for sure, but it seems it’s becoming just a bit too late, should it continue, to lead to a pop corn crop like in 2016. Risk are there for sure but also there is decent precipitation forecast in the corn belt, Illinois, Indiana and Wisconsin are avoided but they are not the areas that need the most urgently soil moisture. For sure we’ll have an eye on the crop condition report on Monday. So this is for the crop size risk. As per the quality risk, focus is still France and Germany, it’s been raining a lot in France, even the match Ukraine Northern Ireland for the Euro 2016 in France has been interrupted following rain and hail. There’s concern about quality and delay of the crop. However, these rains are alternated with sun and a bit more heat so it’s not leaving the crops soggy for a long time but for sure, the boogie man is luring in the dark: he’s called mycotoxin! But French ratings are still decent: although they are down -4% week on week, 75% of the soft wheat is in G/E conditions in France, so, so far, it’s hanging well. Quantity is not at risk in Europe, Stratégie Grains let the estimates unchanged at 146.7MT, a small cut of Germany and France is compensated by better crops in Italia, Spain, Bulgaria and Romania.
Funds were on the sell side anyway, it seems like there is a bit of profit taking just to square position before going in holidays or new short to play the range, for the sport. Funds sold indeed 9,500 Corn, 11,500 Soybeans and 3,500 Wheat. Big swings, CFTC’s COT will give a clearer picture of what happened on the spec side. Market finished down across the board yesterday then and market is rebound gently during the night session, taking a breather after this shaky week.
Saudi is seeking 300,000T of wheat, Algeria bought 150,000T of durum, South Korea’s Kocopia bought 55,000T of US corn and their friends KFA bought 61,000T of Corn.
US exports sales were pretty good, although less than expected for corn: 762.9kT of wheat, 1,088.4kT of corn and 1,585kT of Soybeans. We’ll keep an eye on shipments on Monday as commitments are increasing faster than shipments. On the other side of the pond, also a good week as the end of the season is approaching: 870kT for EU soft wheat licenses, reaching 30.1MT, only 2% behind last year.
Oil is rebounding, contracts seem to range around $50 and are waiting for a fundamental change, else this level seems very sticky. NYMEX Crude has a $46 handle and ICE Brent a $48 handle. Gold is still doing well, lower US dollar and market uncertainty, the precious metal is back above $1,285 per ounce. Meanwhile Freight index BADI, Baltic Dry Index, keep struggling and is now below 600 to 598.
Still very nervous trading on EURUSD and GBPUSD and obviously the cross rate. Next week we’ll have a better view of what’s going to happen. Or maybe not. A Brexit vote would certainly shake the Europe but if ‘Remain’ is wining, is this the end of the story? Nothing is more sure. EURUSD is trading above 1.1250 and GBPUSD above 1.4250.