Yesterday, funds where again on the buy side, they sold so much in two weeks that they’re putting some positions back in quite logically. They sold 14,000 Corn, 7,000 Soybeans and 500 Wheat. Between the top of the 15th of June and the bottom of the 5th of July, CU6 lost -23.65%, that’s a lot just before the summer, so despite the fact S&D are heavy, a lot can happen during the next month. And it’s what it is about and it is the same thing every good year: market is not reacting to actual weather but to what it could be as the downside risk is lower than the upside risk at this time of the year. Market was led once again by Soybeans, finishing up +20 cents, Corn followed half way with +10 cents while Wheat was just up being sympathetic. After being on fire, MATIF closed well off from its highs with a shy +€0.75.

 

Talking about In France, it’s about time the crops are coming to see what is the actual situation. There’s some kind of range in the estimations. As far as soft wheat is concerned, French government expect 36.95MT. Barley is pegged at 11.07MT while rapeseed is seen at 4.8MT. Private analyst ODA sees 32MT while all the coops and collectors sees soft wheat between 33MT and 34MT. SO crop will be welcome to end up the speculation on numbers.

 

Night session has the same pattern, Soybeans up +12ish, Corn half way, Wheat barely higher. MATIF will be very quiet almost of the traders will be away today (Bastille’s Day, the French National Day) and quite a lot will take the day off also tomorrow. Week end mood to expect then.

 

Japan bought 180,714T of US, Canadian and Australian food wheat while the feed wheat and barley in the SBS scheme did not meet great success as 300T of wheat and 200T of barley were booked. In Syria, Hoboob is seeking 200,000T of wheat. Algeria tender results are not available, but mid $190 CNF prices are very likely.

 

NYMEX Crude is just above $45, ICE Brent in the mid-$46’s, Gold correcting to the $1,325 area. On Freight, Baltic Dry Index BADI rose again +15 to 726.

 

It’s been quicker than expected, UK has a new Prime Minister, Theresa May. Market has clearly welcomed the fact there’s no ‘vacancy’ of the Prime Minister post, and GBPUSD is nicely established above 1.32. Political game have been really intense in the past few weeks. Michael Gove backstabbed Boris Johnson but it this the whole story? Indeed, Theresa May was by far the most popular and on top of this the Tories were very likely to vote for her as a nominee as the establishment was mostly in favor of Remain like Theresa May (she was a soft Remain). So did Boris Johnson put himself a convenient target on his back? It’s very convenient for him, he won’t take the responsibility of the PM job and the failure and won’t be seen as the traitor if Brexit is not happening. Indeed, one can really doubt actual Brexit will actually happen and being a Brexiter in a Remain government is actually a much better position. He could be led to lead negotiation for a better deal of the UK inside the EU while blaming the PM for not actually Brexiting but doing himself its duty as best as he can to obtain the best deal as he’s been nominated Foreign Secretary. Boris Johnson political career was said to be over by observer a couple of weeks ago… Not just quite… So on face value, Boris Johnson has now the last laugh over Michael Gove but it’s probably not the whole story anyway. Theresa May’s Brexit minister, David Davis, said however that Article 50 should be triggered before or by the beginning of next year. We’ll surely follow these developments but EU will become very impatient very quickly seeing the new leader not triggering the Article 50 as soon as she’s in the office. But triggering the Article 50 would face opposition of Scots and all the Remainers of the Parliament and there’s risk of being blocked and delayed by UK institutions. EU said no informal negotiation will take place: if UK should be better in or out is a genuine debate, there’s however no doubt EU is better with UK in so they will negotiate. Meanwhile, Goldman Sachs has hired ex-EU Commission President Jose Manuel Barroso. EURUSD still playing around 1.11.

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