Dull day for a change on Soybeans and overall it wasn’t the most exciting session yesterday. Soybeans tried the last two session to go above $10 but it’s now proven to be a strong resistance. That being said, night session is very pacey and Soybeans are now above 1,000 cents, watch out the close! Soybeans finished virtually unchanged while Corn and Wheat struggled and finished respectively down -4 cents or so and around -6 cents, Wheat dangerously approaching the 400 cents level… Market seems to be a bit confuse about where to go, kind of in disbelief that after talking about drought we’re now talking about a record crop. Weather is still seen as favorable on growing areas in the US. It’s probably a chance South America took a rain hit a few month ago else the situation would be quite tough for farmers. Funds sold 7,000 Corn and 3,000 Wheat while they were even on Wheat according to Reuters. MATIF followed Chicago on the down side but in a lower extent, MATIF will be torn between the macro level (heavy world supply) and micro level (French and German crop hit).
French Farm Office gave a new estimates of the soft wheat crop… A pretty nice slash: they cut their estimates from 36.95MT to 29.1MT. Sub 30MT finally, that’s a tough year, not at all what was expected at the start of the season. Barley is seen at 10.2MT and rapeseed at 4.5MT. Although they did not change their corn estimates (13.5MT), it’s going to be a very bad year for French grains, and farmers were already in a tough situation but with a such cut on yield and no real rebound, things are going to get worse.
Night session is showing some very good strength on Soybeans, a two digits rebound to go above 1,000 cents on expiring Q6. Wheat and Corn are a couple of cents up with nothing major but so far.
A good week on US export sales, corn was back above 1MT to 1,227.4kT topping the expectations and soybeans did not have cancellation this week and commitment reached 1,6704kT (including 542.2kT of the old crop, watch out the shipments). On the other side, wheat was pretty weak to 370.5kT. As far as the US balance sheet is concerned, if there’s not enough demand, funds will struggle in holding their remaining Soybeans long, next week USDA WASDE could set up their mind whether they should hold or continue to liquidate. However, on the report, USDA is not expected to be as aggressive as FC Stone on yields as it’s traditionally a bit early for them to do a big bump up. Anyway, on the other side of the pond, EU cleared a little 325kT of soft wheat export licenses and 92kT for barley. EU also imported 207kT of corn. This will be interesting to follow over the season as USDA is expecting 34MT of wheat to be exported from EU, but with Germany and France struggling, it’s going to be a challenge from EU to compete with FSU, so far, 8% only of the target is completed and it’s slightly behind schedule.
Taiwan Flour Mills are seeking 85,250T of US wheat.
Oil has rebounded on $40, it was not expected to be a weak support anyway. NYMEX Crude is back in the mid $41’s while ICE Brent is trading around $44. Again, freight index ADI, Baltic Dry Index, was down -5 to 636 due to lower demand on midsize vessels. Gold is still strong, around $1,360.
EURUSD is in the mid 1.1150’s. US Job data later today can bring a bit of excitement, and confidence (or lack of it) about the raise of FED’s rate.