Market went down across the board yesterday, with Soybeans leading the way, posting another day of a double digits fall: X6 finished down -19 cents indeed in a continuation of the post report move basically on the 50.6 bushels per acre US yield (and consequently +3.83MT on the US production). It dragged Corn down, -9.25 cents on the close of Z6, erasing the post report move (market realised that the report was moderately bullish all other things equal but these other things are actually very amply supplies) and Wheat had no other choice but to follow also, despite a cut of -3.75MT on the world ending stocks, it is still more than 4 months of production. Funds sold 9,500 lots of Corn, 11,000 lots of Soybeans and 3,000 lots of Wheat. On the other side, MATIF rebounded just a tad, taking a breather after the very low final settlement of U6 to €140 and driven by ‘rumours’ on the ugly French provisional final numbers.


Indeed France Agrimer said the French wheat crop is a high protein one! The average protein content of soft wheat is 12.6%, this is +1.6% above last year. However, these are supercharged but light grains: the specific weight is averaging 73kg/hl, down -6.6kg/hl from last year. Meanwhile, 34,200T went to the MATIF delivery, which is basis 76kg/hl with 74kg/hl… Basically this would be some of the best French wheat, so could be sold with nice premium, so it can raise the question? Is this THE Romanian wheat that went to the delivery?


Which leads to the European CME Wheat… It is increasing the volume, day 1 was 223 lots on Z6, day 2 was 857 lots: bids and offers are light but there’s only a single tick bid and offer so this is a very promising start, arbitrage with MATIF will surely help the liquidity. And there is some potential there, indeed, MATIF protein content specification will be in force from U7 (11%) and for Z6, H7 and K7 this is just a test weight specification (basis 76kg/hl with 74kg/hl, as well as the very standard 15% moisture, 4% broken grains, 2% sprouted grains and 2% impurities) while CME is 74kg/hl test weight and 10.5% protein. Currently, 74kg/hl is ‘good’ French wheat, so if one has to go to the MATIF delivery, he will certainly try to minimize the protein content. This is one of the reason why, despite a lower specification, CME EU Wheat could be at premium on expiries before U7 and it did today indeed!


Back to France Agrimer, they released their updated balance sheet… Compared to July that’s some kind of damage! They cut the French soft wheat production by -12.389MT to 28.473MT (-30.3% from last year), ending stocks are seen at 2.229MT, down -26% from last year. Durum is seen as 1.438MT (down -21.48% from last year), so all wheat just shy of 30MT. Tough one! Quite expectable, there was no miracle for barely, just seen above 10MT, -20.4% from last year. All the hopes are on the corn but they are not optimistic either and cut their estimates by -1.448MT to 12.158MT, -7.9% from last year.


Night session was pretty quiet if not boring. Nothing much to say, flattish Soybeans, Corn ticking down, Wheat a couple of cents down, EU Wheat flat, MATIF Wheat ticking down,… Yawn…


In Argentine, new wheat crop is seen at 15MT, +3.7MT from previous crop. USDA WASDE is at 14.4MT. In Australia, ABARES sees very good crops, second best year ever on wheat and barley and third on canola. New wheat crop is seen increasing by +16.06% (surfaces only increased by +0.98%) to 28.079MT (27.5MT in the USDA WASDE), barley at 9.496MT (+10.51% from last crop, despite a decrease of -2.56% of surfaces) and Canola at 3.632MT (+23.37% from last crop with +4.03% increase of surfaces). All the winter crops are set to post an increase from last crop thanks to higher yields and best performers are fava beans (+54.23% to 492kT) and fields pies (54.63% to 317kT), well that’s a lie, tricital crop is seen down -7.18% to 181kT but surely they’ll leave with this and to be honest, surfaces are down -11.11%, so this is still a better yield. The only lower yielding crop is set to be chickpeas: surfaces are up +24.36% but crop is seen higher +21.82% to 1.234MT. On the summer crop, sorghum is seen down -5.51% from last year to 1.932MT but surfaces are lower (-7.34%). All the other (minor) summer crops are seen increasing from last year, Australia is set to post a very good year, there will be a lot to export.


An eye for an eye, a tooth for a tooth: Russia is thinking about banning citrus imports from Russia as a retaliatory measure over the ergot saga. Meanwhile, the Russian Agriculture Minister said he doesn’t believe the ergot saga will impact significantly Russian exports.


Japan finally did met some success in their SBS (simultaneous buy and sell tender) and booked… 350T of feed barley! Joke aside, they are also seeking 149,231T of Wheat in their normal recurrent tender. Taiwan’s MFIG bought 60,000T of US corn, at 145.6 cents premium over Chicago H7.


On oil, NYMEX Crude is now just above $44.50, the oversupplied landscape is set to last. ICE Brent has a $46 handle. US Crude Oil inventories are expected later at +2.8M barrels, also to follow today ethanol data. On Freight, Baltic Dry Index BADI took a hit of -40 (-5.03%) to 756 driven by lower demand on bigger vessels (Capesize index lost -10.14%!).


Dull day on the currencies. Eventless. EURUSD above 1.12. Quiet GBPUSD today also after it took a hit yesterday on lower than expected inflation, waking up the fears of bad Brexit consequences, It currently trades below 1.32.

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