Market finished slightly higher on beans yesterday, +2.75 cents. Meanwhile, Wheat and Corn went down respectively -8.75 cents, and -6.75 cents. Market is really in price discovery mode, still wondering how good, excellent or outstanding the US harvest are going to be, but a bit worried on the wheat side by US and Canada (Minneapolis premium took a hit and closed at 127,75 cents over Chicago and 118.25 cents over Kansas) but in a context of global heavy supply. Basically not the best time to give a longer term trend idea these days. And on the technical part, market is now begin to slowly think about the next week USDA’s WASDE (Wednesday), so there will be a bit of position adjustments most certainly and tonight’s CFTC COT will give a clue on how funds will behave early next week. Funds sold 12,000 lots of Corn, 4,500 lots of Wheat and were on the buy side for Soybeans for 2,000 lots. On the other side of the pond, Wheat followed, MATIF took a -€2.25 hit while CME EU kept resisting with only -€1.00. MATIF At the time of the MATIF close, it was $31.87/T higher than Chicago and $28.29/T above Kansas. There is still a lot of clean-up to operate in Wheat spreads.
Night session is stronger across the board, Soybeans leading the way with +4 cents, while there’s no much excitement on Wheat and Corn up between +1 cents and +2 cents. Europe as open in low volumes, a couple of ticks up or so, no much excitement either as a lot of traders are meeting in Torino.
Eastern Europe is getting cold already and some snow is reported below 800 meters of altitude! Especially in Romania. In the US the hurricane Matthew won’t have an impact on the crops. There’s a bit of rain crossing the Midwest from North West to South East but this is quite moderate and market will expect on Monday to see a very good crop progress.
EU cleared 423kT of wheat export licences. We’ve seen France in the past few weeks managing to ship wheat out but not this week, Germany was on the lead with 134.6kT, followed by Romania with 102kT and Poland with 67.5kT. Germany is still on the lead since the beginning of the season with 1,553.39kT, followed by Romania (1,384.7kT) and the France is still there on the podium with 1,212.27kT. Total this season is so far 6.8MT. EU also cleared a little 11kT of barely export licences. Import licences for Corn were 133kT. On the US side, export sales were very good on Corn and Soybeans, bot above 2MT! Corn sales commitment reached 2,601.8kT and 2,179.6kT. On the other side, wheat sales were low, to 377kT. Shipments will need to be monitored as huge bean and corn new crops are now flooding the market and it could become an issue for wheat.
Egypt bought a fair amount a foodstuff these days. GASC just bought 60,000T of soyoil and 33,500T of sunflower oil. Emptying the shelves for tough time? Devaluation of the EGP could come pretty soon indeed.
Oil has done it! Finally trading back above $50. Since the September lows, market rebounded close to +18%, it begin to sound a bit too much on a deal we don’t know the details, and especially taking into account there is some scepticism about the actual enforcement (especially on the Iran side). And non-OPEC members, like Russia, has not proven any intention in fact to participate (they are pumping at a record level) so this alleged cut could just be without effect on global oil production… NYMEX Crude is trading above $50.50 and ICE Brent around $52.75. On the freight side, Baltic Dry Index BADI made it back to above 900 in style, posting a gain of +46 to 915, dragged by higher demand on larger vessels (Capesise index was up +10.24%!)
Flash crash! It’s said an algorithm got crazy and did a virtual fat finger triggering stops and so on, a virtual panic mode went on and GBPUSD went down to 1.1819! Back in Q1 1985! However, most of it has recovered by there is still damage and GBPUSD is now trading in the mid-1.24’s. On top of this, the UK’s manufacturing month on month progressed by only +0.2%, lower than expected. EURUSD is weaker, now in the lows 1.11: yesterday, the US unemployment claims were lower (that’s obviously better) than expected to 249k. Unemployment rate and non-farm payrolls today will be interesting in that context. The case