Soybeans finished up yesterday +7.75 cents on U6 and U6/X6 spread moved down -2.75 cents quite surprisingly. There’s still some tensions on the short term. Market also welcomed good inspections data. On the other side, sell off on Wheat, losing -12.25 cents on the front month in Chicago. Corn just finished a couple of ticks down, struggling to find a direction in the middle. Funds sold 5,000 Corn, 6,000 Wheat and bought 6,000 Soybeans.


The last hour has been particularly painful for the MATIF. Milling wheat lost -€2.75 during the last hour, finishing down -€4.25. There’s a big question here, especially seeing the contango increasing (U/Z was at -8.25 on the close). Will the confirmed Bulgarian vessel (the Romanian was is so far still at the rumor stage) be brought to MATIF delivery? If it’s said its mainly for starch industrials, it is still possible for a balance quantity to be brought to delivery if it’s been played ‘skillfully’ with the silo operator. MATIF is European Wheat not French Wheat and this might scare those who were thinking about going to the delivery and get French wheat by default. But the main issue is certainly the fact market is starting to realize the problem is only fractal as France is surrounded by countries doing well with their crop. So if French wheat is not even competitive in France, operators will import. So an adjustment is totally understandable. MATIF is still down today, much less spread action though.


Night session was on the downside across the board, the crop tours are going on and no disaster so far is forecasted.


Contest to find worst looking corn cob is on! Pro Farmer Tour has started indeed! After the first day the feeling is mixed. Some relative disappointment on corn and some good surprises on soybeans. On corn, South Dakota and Ohio are disappointing compared to the 3 year average. Their official Ohio estimation is 148.96 bushels per acre while the 3 year average is 167.37 bushels per acre. USDA latest estimation for Ohio is 163 bushels per acre. For South Dakota, they see 149.78 bushels per acre compared to 160.13 bushels per acre for the 3 year average. USDA latest estimation for South Dakota is 147 bushels per acre. So good news in South Dakota partially compensate the bad news on Ohio. However, Ohio is 3.67% of the US production so we’re talking about a cut of 1.22MT in Ohio. And there’s some skepticism in the extrapolation to the full state as the route they took was apparently widely expected to be a bad one, not necessarily repetitive of the full state. South Dakota better yield would see an increase of 0.43MT. So overall, we lost -0.79MT of the corn crop. Anyway, Iowa, Illinois, Nebraska, Minnesota and Indiana are the main states to focus on anyway. As per soybeans, the pods count (in a 3’ by 3’ square) was lower than the average but surprisingly good: 1,055.05 in Ohio (1,250.43 for the 3 year average) and 970.61 in South Dakota (1,043.15 for the 3 year average) and the current worries stays the sudden death syndrome but so far, even if it’s tougher to do yield estimates at this time for soybeans, it’s not massively expected to diverge from the USDA expectations.


As per the conditions, soybeans ratings did not move: 72% G/E (63% last year) and 7% P/VP (11% last year). Corn actually improved despite the fears: 75% G/E (+1% from last week, last year it was 69%) and 7% P/VP (no weekly move, 10% last year). So there’s not much worry as 85% of the corn is doughing and 40% is denting, while 89% of the soybeans have set pods. Spring wheat is 65% harvested.


Yesterday also market was expecting export inspections and market has been genuinely surprised by the strength of corn and beans shipments. Corn shipments reached 1,249.3kT: it’s good, yeah? Certainly but not enough! 2 weeks remaining (well the last one will be a fraction) and 5.177MT need to be shipped, this is Impossible Mission. But soybeans held their promise! 961.4kT were exported, that’s enough! 1.558MT is needed by the end of the month, this is far from being impossible. Wheat was good enough, 530.8kT, slightly above the 485kT remaining.


GASC was in yesterday night, after a big sell off, this is not massively surprising. They received 10 offers and as expected, French wheat is nowhere to be seen. Best FOB is from Ukraine at $171.10 FOB and despite the freight disadvantage from compared to Russia will also be best CNF ($182.17). Russian wheat is only in third place, behind the second offer of $177.24 FOB ($185.71 CNF) of Ukrainian wheat, with $179.90 FOB ($186.50 CNF). There’s a bit of difference with the most competitive vessel and the second one, GASC could book one and retender, or negotiate.


On the corporate side, COFCO confirmed they will take full ownership of Nidera, completion is expected to be done in Q4.


No major move on the EURUSD, trading around 1.13, market will wait for the FED decision, which is widely expect to be a status quo, but if the rate hike is actually happening, fasten the seatbelt and enjoy the US dollar rally. Oil has retreated: after careful consideration, oversupply situation probably won’t be solved by next OPEC meeting.

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