USDA heatmap computed with the cheat sheet: https://vinzenergy.wordpress.com/2016/06/11/heatmap-cheat-cheat-usda-wasde-report-excel-vba-macro-automation-wheat-corn-soybeans/

So, Soybeans finished down -14,50 cents, Corn down -0.75 cents, Wheat up +6 cents on the main event of the day, the USDA WASDE report. Market reacted to lower world ending stocks on wheat, no big damage on corn and heavier balance sheet on soybeans. Funds sold 5,000 lots of Corn, 9,000 lots of Soybeans and bought 3,500 lots of Wheat.

snapshot-september-2016

MATIF was flat, well last day of U6 was epic though, -€3.50 to €140.25, that was €18 carry with Z6, flat on the day. First day of the CME EU Wheat contract was quiet, 223 lots traded but bid offer spread was a tick so hope is permitted. It finished just at -€1 discount to the MATIF which is less than the expectable quality discount.

 

So main event of the day was the USDA WASDE indeed.

 

On wheat, obviously no major change on the old crop balance sheet, a small increase of Southeast Asia consumption (+0.7MT) let the way to lighter ending stocks (-0.99MT), On new crop, no massive surprise either. The consumption was bumped up for a total of +4.18MT led by North Africa (+0.6MT) as well as India (+2MT). On the production side, Australia is raised at 27.5MT (+1MT) and Canada to 30.5MT (+0.5MT). There was no change on the US balance sheet, no change to Russian and Ukrainian production (although Kazak production is up +1.5MT to 16.5MT). Word Ending stocks are down -3.75MT to 249.07MT, which is +8.18MT from old crop, 33.44% of the production and 33.81% of the consumption. In other words, there won’t be any shortage of wheat anytime soon.

wheat-old-september-2016

wheat-new-september-2016

wheat-old-to-new-september-2016

On Corn, virtually no change on the old crop: less exports in the US (-0.26MT to 48.64MT) and Brazil (-1.5MT, basically taking the full hi of the production cut) is compensated by higher exports in Argentina (+1MT) and Mexican production (up +0.8MT). On the new crop, US yield was under scrutiny, and it was cut! From 175.1 to 174.4 bushels per acre, the production is taking a hit of -1.54MT to a still huge 383.38MT. European Union crop is also cut (-0.95MT) as well as China (-2MT). On the other side, Brazilian crop is raised to 82.5MT (+2.5MT). US use is cut by -0.64MT, mostly on the feed side. World ending stocks are cut by -1.35MT to 219.46MT, +10.21MT from old crop and this is 21.38% of the production, 21.59% of the use. There’s also a lot of buffer there!

corn-old-september-2016

corn-new-september-2016

corn-old-to-new-september-2016

On soybeans as well, no significant change overall on the old crop, US exports are raised +1.63MT to 52.8MT. All the eyes were also on the US crop, and as it could be felt, the yield has been raised above 50 bushels per acre to 50.6 bushels per acre (+1.7 bushels per acre from previous WASDE) and the production is gaining +3.83MT. This is completely offset by other countries hit: most notably -2MT in Brazil to 101MT. Lower world crush (-1.03MT) is bringing the ending stocks higher by +0.93MT to 72.17MT, only -0.73MT from last year and still 21.84% of the production and 21.96% of the consumption, a drastic different picture than 6 months ago when the South American floods made expecting the worse.

beans-old-september-2016

beans-new-september-2016

beans-old-to-new-september-2016

Last word on the USDA WASDE, we said old corn exports was adjusted to 48.64MT and 52.8MT for soybeans while export inspections totalized respectively 46.753MT and 51.333MT for soybeans.

 

Talking about export inspections, very good number for corn, 1,343.9kT were shipped (and it better, there will be a lot of corn to send abroad) while soybeans was also pretty good to 948.6kT (a bit short of the weekly split but new crop has not arrived just yet). Also a very good week for wheat with 720.4kT.

 

On crop report, no major excitement either and it won’t probably ever again… Till next season! Corn condition were unchanged from last week to 74% G/E and 7% P/VP, Soybeans also unchanged to 73% G/E and 7% P/VP. Much better than last year. Also, 5% of the corn has been harvested and 6% of the winter wheat planted, another season is just over and a new one is starting!

 

Oil is still around $45. No major excitement either on the currency side, EURUSD still ranging in the 1.12 figure while GBPUSD is above 1.33. Night session is also very quiet so far, market is trying to digest the USDA report and might realise this was actually a very dull one.

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