Market finished the week collectively higher on Friday. Led by Corn (+7 cents) while Soybeans and Wheat were more or less up +3 cents. Weekly movement has been pretty deceiving, overall a very quiet week, noting much to feed some thrill. Wheat was interesting though, Chicago was down -0.68% but Minneapolis up +2.13% and Kansas -1.42%. Minneapolis is dragged up by the Canadian issue while there’s no issue about quality and quantity in the south of the US. In Europe, MATIF was down -0.32% is US dollar and CME EU was up +0.45% in US dollar. There is still something wrong in there, it can only be a matter of market structure or some ‘skilful’ arbitrages, as overpaying by almost +€6 (MATIF discount to 74 specific weight included) to ensure to have 10.5% protein and 170 Hagberg is totally unjustified, especially considering the fact the protein is good in France, there’s no major issue about falling number either. This year is a yield and test weight issue, nothing else. It would mean that operators are actually thinking MATIF could be stuffed with feed wheat at the delivery. We’ve been there in 2014, silo operators will do everything in their power to avoid that and one can remember how angry the market was when contract specs were informally changed to ensure what is delivered was milling wheat, not just wheat matching the specs of the contract. Corn scenario was boring, small down the Friday full reversion and finished the week higher +0.07%, just a tick! Soybeans finished the week down -0.10%, that’s just a cent, on a very technical week. For sure crop progress will be watched closely.


Another interesting CFTC’s COT. Over the week ending on Tuesday, funds sold. They increase their short on Wheat by 4,152 lots to 131,417 lots, increased their short on Corn by 15,252 lots to 176,844 lots and decreased their long position on Soybeans by 32,781 lots to 57,652 lots. Cumulated short is now over 250,000 lots and the long Soybeans is vanishing. By the meantime, market move -0.92% on Wheat, -2.43% on Corn and -2.36% on Soybeans. The interesting fact is that market was expecting only a little selling over the week on Wheat (Reuters was estimating 100 lots) and 16,000 lots only on Soybeans. Both have been sold more than expected, but Wheat resisted well, most probably thanks to Minneapolis dragged higher by the fusarium in Canada talks. From Wednesday to Friday, it’s estimated funds sold 700 Wheat and bought 9,000 Corn and 1,700 Soybeans.


Slow start of the week, Soybeans are ticking up, Corn is ticking down, Wheat is down -2 cents or so, but Minneapolis keeps on resisting (flattish). On the European side, same main story, CME EU premium is increasing… Today, export inspections, and crop progress to follow.


In Oil, Russia has pumped a record level of 11.1M barrels per day in September. Adding to the fact Iran is still not really keen on the OPEC deal, if there’s an actual cut of production of Saudi, it could just be compensated by non-OPEC members and OPEC member not enforcing the deal. Oil is starting the week higher anyway, NTMEX Crus is in the mid $48’s while ICE Brent is in the mid $50’s.


EURUSD and GBPUSD was really boring also last week, respectively up +0.14% and up +0.02%. EURUSD is stuck between 1.1225 and 1.1250 and it is the same today… However, a bit of action going on GBPUSD, softer this Monday and trading around 1.2875 as Brexit is back on the headlines: Theresa May, the British MP, said the Article 50 will be triggered by March 2017, enabling the UK to be out be summer 2019. Some are still sceptical, some other say it can only bring to a hard Brexit, damaging for the UK. Time will tel.

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