Much more quiet week last week in terms of weekly movement, the intraweek and intraday volatility was of course pretty high! Last week, Soybeans lost -0.99%, SoyMeal -1.83%, SoyOil -1.78%. ICE Canola  moved up +0.57% in US dollars while MATIF Rapeseed moved up +2.10% in US dollars. The divergence between the two groups is most probably due to the cut of the repassed crop in Germany (-1.2% from last year) and in France (-9.1% from last year), coming on top of lower Canadian Canola seeding intention (-0.4%). Corn was just down -0.77%, Wheat -2.36% in Chicago, -1.78% in Minneapolis and -0.85% in Kansas. Corn and Beans were down indeed on drought fears easing and good rains (pure weather market) while Wheat lack of bullish news is still weighting on the US side. On the French side, harvest is slowly entering silos and speculation is well going on about quality, deceases, protein, milling potential,… So MATIF had a bumpy week and actually closed up +0.15% in US dollars (EURUSD was barely down -0.16% over the week by the way). Interestingly, despite a +1.83% gain on the GBPUSD, LIFFE Feed Wheat continued to be bid and was up +0.49% in GBP (+2.33% in US dollars). As per the Friday session, market was down across the board on good weather prospects and more or less erased the weekly gains while MATIF finished up taking a breather after a couple of crazy sessions. On Friday, funds sold 13,000 Corn, 7,000 Soybeans and 5,000 Wheat.


Friday, the CFTC’s COT was like… Wow! On the week ending Tuesday, funds had got rid of almost their full long position on Corn! They sold 94,401 lots and they are now only long 8,702 lots. Reuters had estimated they were on the sell side but only for 14,500 lot. In other words, funds have sneakily, discreetly and quietly sold a big bunch of lots! But they met some buying, over the same period U6 contracts actually moved up +0.43%. Open interest actually moved up, it seems like producers and merchant put some new long in. Pretty interesting situation. Much less surprise on Wheat and Soybeans, funds were also on the sell side, selling respectively 12,424 lots and 7,921 lots. Funds increased their short position on Wheat to 114,668 lots while they decreased their long on Soybeans to 159,407 lots. Overall long has vanished, and from Wednesday to Friday, the same pattern was on as funds were seller across the board and now, it’s estimated they are flat Corn and the long on Soybeans (142,000 lots) is only exceeding the short on Wheat (122,000 lots) by 20,000 lots. Picture has drastically changed in a few weeks.


GASC second tender of the week! Indeed, Egypt was there across the week-end, with a good old Saturday tender. French were not massively disturbed during their long week-end, the situation is the same as earlier in the week for the 1st tender: they are not keen on taking risk on the new crop quality just yet and it’s not competitive facing the Black Sea. Adding the ergot shamble in the balance, French wheat was nowhere to be seen and it’s likely to be that way for a few weeks if not months. GASC is trying by the way to bring confidence back to the market, communicating about ergot: last rejected vessel was said to be above 0.05%, implying the rejection was genuine. So after the 180kT booked of Tuesday (120kT of Russian wheat and 60kT of Ukrainian wheat at an average of $173.03 CNF) over the 1.01MT offered, GASC has been offered a total of 890kT (300kT being Romanian, 535kT Russian and 55kT Ukrainian), not too bad, especially for a Saturday! They booked 300kT at $174.99 CNF average (180kT of Romanian, and 120kT from Russia). So far, it is a lower average monthly price of purchase GASC achieved compared to the last 2 seasons.


Back to French wheat, as 7% of the soft wheat is harvested, ratings took a tough hit: -10% of G/E in a week to only 49%. As per the durum, hearing a bit of everything. In the south east of France some farmers have seen record on their parcels wit 9.1T per hectare, 82 specific weight and 14% protein! In the traditionally warmest part of France in the South, situation seems decent to be decent. It’s a bit anecdotic but it has been quite hot during the week end that a probably quite dirty and dusty combine took fire and destroyed 2 hectares of high quality durum. On the other side, in the western part of French durum areas, some farmers wonder if they can actually sell their durum. So hearing anything from 40% to 60% of downgrade to feed. We’ll see but don’t count of France for durum this year basically.


Export inspections later today, let’s keep an eye on Soybeans as the amount of unshipped soybeans begins to be a genuine source of worry. Also today, crop ratings, we’ll see if beneficial weather has improved the crops. Night session is again in the red for Soybeans (-10 cents) but there is still this steep backwardation. Wheat is up a bit more than +5 cents, Corn just up a few ticks (+2 cents) while MATIF has a very good start of the day with U6 going back above €160.


Oil started the week on a higher note but is likely to still range: NYMEX Crude is close to $46 while ICE Brent has a $47 handle. Gold is retreating, market needs slightly less a safe haven these day: it’s trading just above $1,325 per ounce. EURUSD and GBPUSD are starting the week on a positive note, there’s hope that the new UK government won’t be very aggressive to leave the EU and that EU, despite what they said earlier, will be keen on negotiating. Boris Johnson (foreign affairs) is due to do its first tri in Brussel and is keen on proving he can do the job.

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