The day after the report got more action that the report day! Frank rebound across the board yesterday. Soybeans finished up just a couple of tics shy from +10 cents while Corn was above the mark, almost +13 cents up. But the real star of the day was Wheat, finishing just shy of +20 cents. No bearish news in the USDA WASDE for wheat (quite expectable considering the season), good demand on international tenders, reminder that US wheat might be in the competition and maybe a bit boredom of funds being short with some of them not making a lot of money: short covering makes sense. Also, there’s some talks about La Niña timing, strength and influence on the northern hemisphere. Funds bought 13,000 Corn, 9,500 Soybeans and 11,000 Wheat. On the other side of the pond, markets followed Chicago, higher on MATIF and CME EU just a bit more than one percent, with CME EU losing a tick of its premium. London Wheat was also up and the low GBPUSD will be clearly beneficial and UK exports are going to be boosted for sure.
Night session is up again across the board, Soybeans are up +6.50 cents, Corn +5.50 cents, and Wheat +7.50 cents. Also up in Europe, MATIF being up +€1.75 and CME EU +€2.25, taking back the bit of its premium lost. If there’s some behind the scene arrangements between operators, this could just go up to the smaller location discount…
GASC has bought 180,000T of wheat, 60kT from Russia and 120kT from Romania, virtually at the same CNF price of $187 (Russian was 1 cents lower, making the actual average to $186.9967). There’s a bit of events at each tender these days. First they required direct bidding instead for going through a third party, a middleman is not going to be happy and lose some easy business here! Also, 6 cargoes were offered so confidence over the ergot shamble is slow to come back. On top of this there were 2 cargoes of US wheat that have been disqualified as HRW is too hard for them. But this is showing that US wheat could become competitive in the international scene. Algerian tender results is as usual not published but it’s thought it’s been booked between $195 and $200 CNF. Taiwan flour mills bought 80,650T of US wheat, South Korea Kocopia bought 55,000T of corn while MFG bought 132,000T. Also, it is said that Syria has finally booked the 1MT deal of Russian Wheat but no real info is available. EU cleared a good 526,000T of soft wheat export licences
In France, Dry conditions haven’t worsen the already bad conditions of corn. It’s still at 53% G/E, quite low. Meanwhile, 23% is harvested, up +13% from last week and it’s 10% behind last year: it’s likely to reach only 12.2MT. As per the plantings, 23% of the winter wheat is sowed (+17% from last week), also delayed (-11% from last year) due to dry conditions. It’s been a very unusual season in France, way too much rain when it was not needed and not enough when needed.
SovEcon as bumped up to 119MT its estimates for the grains crop, +2MT above government expectations. Meanwhile wheat crop is seen at 72MT, matching USDA WASDE.
US Crude Oil inventories were expected up +0.4M barrels and they were up actually +4.9M barrels, on the other side, Gasoline stocks were down more than expected by -1.9M barrels. It hasn’t really put some pressure on the markets, still stuck around $50, waiting for more information about the OPEC deal. NYMEX Crude is trading just below $51 and ICE Brent in the mid $42’s. In Ethanol, stocks are down 784,000 barrels and went below 20M barrels to 19.39M barrels, it’s partially explained by lower production (-18,000 barrels per day to 962,000 barrels per day) but still demand was overall bullish.
US Unemployment Claims were better than expected to 246k, another little argument for a rate hike in a few weeks. Retail Sales and PPI today can again strength the case for FED has to hike the rate in December. EURUSD has rebounded though, after a fall below 1.10 it’s currently trading just above the psychologic mark.