Another very strange session yesterday. MATIF opened higher and finally traded down, following US markets to close down -€0.5. Weather is better, the corn belt has been covered extensively by rains, the soil moisture is likely to improve, and in the South, no massive worsening is expected in the areas of concerns. Also, La Niña longer term adverse effects are beginning to be discounted. Rain is needed as it’s pretty warm and drying quickly though. So Corn closed -9.25 cents down on U6. Soybeans followed with -8.50 on Q6 as rains will be also beneficial. Wheat also finished down -5 cents. But also, market closed well off from their lows in a pretty violent closing rally, it seems funds are keen on putting back on the short they have diched the past few sessions. However, they were still on the selling side and the higher longs begin to feel the pain: funds sold 13,000 Corn, 3,500 Soybeans and 3,000 Wheat.
Night session closed on the higher side. Market is taking a breather. Corn and Wheat are leading the way with almost +10 cents whiles Soybeans are up just a couple of cents. MATIF is also rebounding, in excess of +1.5%.
Wet weather in France are seen hitting the yields, Stratégie Grains sees the wheat yield at 6.98T per hectares, in other words, this is cutting their estimates by -2MT to 36.5MT. Although France need a cut and sees it as a relief, this is still an abundant crop and there will still be a drastic lack of milling wheat and feed export destinations will have to be found. Meanwhile in Russia, harvest is going on and Ikar sees the wheat output between 65MT and 66MT. Still on the weather side, good rainfalls in India is giving good hopes for the local soybean crop.
South Korea Kocopia bought about 55kT of optional Corn. Taiwan bought about 106kT of US wheat.
GBPUSD is below 1.30 while EURUSD is below 1.11. Brexit vote has created a nice volatility on currencies while, in the UK, it’s still unsure who’s going to be the next Prime Minister, very likely to be Theresa May… She officially supported the ‘Remain’ camp in the David Cameron’s government. One could thing a ‘Brexiter’ should lead the country to the exit of the EU but no. However, markets hopes there will be some kind of deal.
Oil struggles to go back to $50 dollar. Very sticky level: NYMEX Crude is close to $48 while ICE Brent is just above $49. On Freight Baltic Dry Index BADI is continuing its road to 700, having resumed an upward trend. Gold is still very strong, above $1,360.