Correction across the board yesterday, the strength of dollar was clearly adding some pressure on this mostly technical move. Soybeans were down -5.50 cents on the close, Corn -7 cents, and Wheat -4 cents. To be noted, Minneapolis was on the upside, ticking a couple of cents up on the close. Funds sold 10,000 lots of Corn, 6,000 lots of Soybeans and 2,000 lots of Wheat. In Europe, MATIF Z6 flat, CME EU +€1. FC Stone has interesting theory, the process of delivery being more simple and in effect the quarry cheaper, it’s more like a technical premium rather than quality or arbitrage.
Today, quiet Friday and dispersion, there’s no common movement. Soybeans are up 4.25 cents, November options are expiring today so very technical. Corn is up no more than a couple of cents, and wheat is down -2.50 cents. In Europe, CME EU premium is reaching €9 euros, MATIF being only up +0.50 while CME EU is up +€1.50 hale an hour into the close.
There are still some talks about La Niña, and some fears that Brazilian rains, up to 10 inches on some places, could have a negative impact on quality.
Very low week on soft wheat exports in the EU. If soft wheat exports are just on line, all wheat are 2 to 3 weeks delayed as they reached 8.15MT out of the 26MT expected by the USDA, for sure it’s a data to follow. Unusual podium this week: Netherlands were on the lead, followed by Latvia and the UK. As per durum, it was 46kT, 22kT of flour, Barley was 64kT and Corn imports reached 123kT. On the other side of the pond, US export sales were strong, especially on soybeans (2,008.8kT). Corn sales reached 1,022.9kT while wheat was a tad lower than last week to 513.8kT.
GASC booked 2 vessels only, reaching 1.62MT this season, they’re back on schedule compared to the average of the 3 last season, but for sure they cannot ignore what is the reason for this… Confidence is still hurt and only 5 daredevils offered a total of 300kt, all but 60kT being from Russia (the last 60kT were from Romania). Russian FOB offers were between $179.55 and $186.00 and Romanian was offered at $187.01, no one was obviously desperate to sell and the prices were not aggressive by any means. So GASC bought 120kT of Russian wheat from Cargill and ECTP at $189.44 average CNF.
In Canada, it’s getting cold and even snowing in some places as 21% of surfaces are still to be harvested. There’s fears some fields won’t be able to be harvested, especially in Saskatchewan.
Oil is still around having a $50 handle, still tough to see it diverting without any supply actual cut as more fields are becoming competitive with these higher prices, and shale gas is coming back in the equation. NYMEX Crude is trading around $50.50 and ICE Brent around $51.50. On Freight, Baltic Dry Index BADI pattern is similar day on day: low demand on larger vessels is dragging the index down but this is partially offset by decent demand on mid-size vessels. BADI is down today -7 to 842.
ECB did not change anything, everything is going well, Draghi doesn’t see any problem with the Central Bank balance sheet and indicated QE won’t stop anytime soon and when it appends it won’t be without tapering. Still €80b per month are set to come in the balance sheet for a few more month. Obviously this has put some pressure on EURUSD, now trading just above 1.0850. GBP is resisting well, cross rate is actually up today (GBPUSD trading around 1.1225, as Theresa May was in Brussel, it seems there’s mission to convince her, to beg her to say, Donald Tusk seems still hopeful Brexit won’t happen and the door for negotiations still seems to be opened. GBPUSD is trading around 1.22.