Yesterday it was a clean-up day, risk off on Wheat and Corn: funds short cover indeed their positions. With USDA WASDE and US elections one cannot be blamed to prefer sit back, relax and enjoy the show! On their side, soybeans were on a technical rebound and X6 attraction to the $10 level was irresistible. Soybeans ended up +12.50 cents, Corn +8 cents and Wheat +5.25 cents in Chicago while there was still some intermarket spreads moves as Kansas and Minneapolis were both up +7.50 cents. Funds bought 25,000 lots of Corn, 5,000 lots of Soybeans and 7,500 lots of Wheat. It was the usual CFTC’s COT weekly cut-off so traders will look at a buying week: Reuters estimates funds purchased 4,500 lots of Wheat over the week, 13,000 lots of Corn and 10,000 lots of Soybeans. In EUROPE, MATIF was also up, +€1.50 while CME EU was only ticking up, CME premium to MATIF was back to €11.
Night session is red across the board. Soybeans front month is back below $10 with -8.25 cents, Corn is following with -3.75 cents and Wheat is down -4.75 cents. USDA WASDE will be interesting in this market atmosphere! MATIF is also down -€1 and is resisting pretty well considering the euro strength. CME EU is flat. Fundamentals might matter later today and report is expected to be bearish on the US balance sheets but no major modification of grains landscape to expect.
GASC bought 240kT of wheat, including 60kT of Romanian wheat, the rest being from Russia. 420kT was offered, so the EGP situation doesn’t seem to have a great impact on traders willing to offer. Average purchase CNF is $199.31
A Brexit like night. The unexpected has happened. The result of the US election is probably the one that is going to spark the less post-election controversy and legal challenge but for sure the most turmoil on markets. And it started already! Currencies went crazy! EURUSD spiked until 1.1299 and is now trading around 1.11. Mexican Pesos collapsed MXNUSD spiked from 18.30 to 20.77! Nikkei in lost -5.36%, Hang Seng -2.16%,… Markets in Europe are on the downside in a lower extent and US markets are set to follow the same path. Oil was also volatile and bottomed at $43.07 before recovering back to $45. A rate hike is even at jeopardy for December, the odd have fallen dramatically overnight… So clearly some uncertainty is thrown into the global markets. For sure it will also have political repercussions in Europe as elections are coming in France and Germany… And maybe in the UK as the spectrum of Theresa May calling a General Election becomes widely possible.