Not a lot to say so far today as US markets will reopen for the day session. Will be fun to see how it’s reopening after the epic end of las week.
However, weather was not in holidays but was holiday actually compliant and did not spoil traditional 4th of July barbecues. A bit of rain is forecasted in the next 48 hours, especially in the South and will hopefully give a bit or relief to the soil moisture. It’s not expected to be drastically better but no we should see no worsening in the South in the next Drought Monitor. Else, next week some rains are forecasted all around corn and soybean areas so there should not be massive concern. The fears of a drought are still in the minds, but comparing to the worst recent drought, 2012, it should have started already since a couple of month. So in case there’s an actual widespread drought in the corn belt, it’s coming pretty late. In Russia, winter crops are being harvested at a very good pace despite a few rains putting the combines on hold. Seems like the crop will be very sizeable but also there are some concerns about quality due to the wet June. If France and UK are mostly dry, the sun is covered by clouds and temperatures are well below what July should be… There will be plenty of feed wheat in the UK and in France, but for sure, quality milling wheat is going to be a rarity and Germany, Baltic and Swedish wheat will be in a better position.
MATIF was opened yesterday and rebounded after the debacle and in the absence of US markets to take a bearing point. Milling Wheat U6 was up +€1.5 and U6/Z6 spread has been pretty erratic during the day with very low volumes. MATIF Corn just ticked higher, while MATIF Rapeseed just ticked lower, also in depressing low volumes. LIFF London Feed wheat was up +£1.25. Interesting movement on the London wheat these days indeed. It had opened with a £4 upside gap on the day after the EU referendum and yesterday, 1 tick of the gap has been erased. Obviously heavily influenced by the GBPUSD, it seems like the recent interest and excitement is fading. However, if cable stays at a low level, next season, the UK wheat will be to be taken into account in the international scene and with plenty of feed wheat around, this is going to be a very interesting battle.
MATIF opened quietly, barely ticking down.
Talking about Pound Sterling, it’s back down this morning: -1.17%. EURUSD is not making ant significant move and is trading still above 1.1125.
Ergot saga is still going on. Quarantine authority confirmed the tolerance will be 0.05%. Kind of déjà vu!