Another tough session yesterday for oilseeds, Soybeans front month closed down -10 cents but this is quite interesting to see the backwardation is not ready to fade even with a such correction. Similarly, ICE Canola went down -1.5% yesterday. It’s getting now anticipated there will be ore Soybeans than expected in the US, leaving a bit the pressure off South America. Wheat was also down yesterday, finishing down -4 cents or so, heavily attracted by the 400 level. Corn finished with no significant move, the curve closing sideways. Yesterday, funds sold 4,000 Corn, 8,000 Soybeans and 3,000 Wheat. MATIF Wheat was on a good day, there’s a lot of uncertainty about where it should go. Indeed, the issue is focused on France (still a wide range from 28MT to 32MT and with huge quality issues) and Germany (the association of German Farmers sees the crop -10% to -20% lower from last year, meanwhile Agritel estimated the German crop to 26.03MT which is only -1.9% from last year) but there will be better availability from Bulgaria, Romania and obviously FSU. So as far as this side of the globe is concerned, there’ no major macro issue but obviously MATIF is a bit lost. French wheat is not competitive by any means and could even become uncompetitive on the local market as it’s reported that the Romanian cargo was for a French starch producer. MATIF is trading $40 above Chicago, $39 above Kansas and $10 above Minneapolis.


As expected, French wheat obviously did not show up to the GASC tender and it’s very unlikely anything happens before December with French wheat, and maybe worse if the exportable surplus is not complying with milling specs. Anyway, GASC bought one cargo (60kT) of Russian Wheat at $177.09, it’s very likely to see them coming back soon. Still on the tender side, India had received offers at $216.23 CNF for the 200,000T of non-GMO corn. Japan bought 55.5kT of feed wheat and 4.5kT of feed barley in the SBS tender. Finally, South Korea Kocopia bought 55,000T of corn, optional origin.


Meanwhile, harvest in FSU are going pretty well, Ukraine is 88% completed on wheat (22.7MT harvested so far) and Russia is at 34% with 37,9MT harvested. So big crop ahead in Russia and interestingly enough, the pace of exports is lower than last year with only 2MT (-25%). Back in Ukraine, barley is 92% completed (2.6MT) and 90% for rapeseed (1.07MT).


Night session was on the upside, nothing major for Wheat and Corn, a couple of cents here and there but Soybeans did a complete reversal printing +13.75 at the end of the night session. MATIF is quiet, up a couple of cents. EURUSD is testing the 1.12 level on good stats coming from Europe while GBPUSD is above 1.33, the perspective of a quick Brexit is fading, maybe if we don’t talk about it for a while, everyone will forget about it! Oil is now below $40 as far as the NYMEX Crude is concerned while ICE Brent has a $42 handle. Gold is above $1,360, clearly, so far, the bullish commodity of the year. On freight, lower oil and lower demand of mid-size vessels is weighting on the Baltic Dry Index BADI, down -5 to 645 yesterday.

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