Tuesday reversal is usually a fifty-fifty urban legend and it was the other fifty yesterday. A continuation of the Monday’s move but apart from Soybeans there was not much conviction. There’s a little bit of worry in the South American weather, some winter kills talks already in the northern hemisphere, a bit of drought in the US,… Not a lot but enough to fuel the bullish momentum. But Soybeans are also driven by good demand and funds are acting like a sheep herd, they’re buying. Soybeans F7 ended up +4.25 cents, failing to close above 1,050 cents. Corn Z6 was following from behind with +1.50 cents and Wheat Z6 was just ticking up on the close. Funds bought 6,500 Corn, 6,500 Soybeans and sold 1,000 Wheat. That’s it, Kansas is back below Chicago, Z6 closed indeed at a discount of -2.50 cents. We’ll see how much time Minneapolis can sustain a such premium as it closed up – again – to 149.25 cents over Chicago and 151.75 cents over Kansas. In Europe, MATIF Wheat ended +€3.00 up and CME EU -€3.00 with a little 10 lots traded.
No major surprise in StatsCan. Wheat was slightly above market expectations to 31.73MT, this would be a +14.99% from last crop. But it is not diverting massively from USDA WASDE that was pegging the crop to 31.5MT. Canola is pegged at 18.42MT, +0.24% year on year, barley at 8.78MT, +6.73% year on year and oats are pegged to 3.15MT, -8.11% year on year. It’s the only market that reacted to the news, CBOT Oats H7 rebounded +2.46% and is still trading up today.
Night session is pretty dull so far, Soybeans curve is sideways for a couple of ticks or so while Wheat and Corn are down -2 cents or so. MATIF Is expected to tick down at the opening.
USDA WASDE on Friday. No major change expected on the US balance sheet, market is betting on a +0.25MT increase of US corn ending stocks on higher production and -0.27MT of US soybeans ending stocks on maybe a little change on exports. US wheat balance sheet is not expected to change, unless USDA thinks soybeans exports are going to slow down giving some more room to wheat to perform on the export scene. Worldwide, no major change expected for this December report, Australia, Canada, South America, Black Sea could see a couple of adjustments but the big picture will see very few significant changes: wheat ending stocks are seen +1.1MT, corn +1MT and soybeans -0.2MT. This report probably won’t be a reason to delay leaving for the week-end!
Jordan bought 50,000T of wheat at $205 CNF, Japan is seeking 123,354T of food wheat. China keeps selling bits by bits its ageing grain stocks. They managed to get rid of 4,814T of their imported wheat stocks, stored since 2013. 74,292T were offered for sale.
US Crude Oil Inventories are expected down -1.4M barrels later today. The poll is usually not very accurate… Meanwhile, NYMEX Crude is still carrying a $50 handle and ICE Brent a $53 handle.
Big miss for the quarterly Australian GDP: -0.5% while +0.2% expected. Small consolation, previous was revised to +0.6% (from +0.5%). AUDUSD is logically under pressure trading just above 0.7525. No major stat expected today, German Industrial production was lower than expected to +0.3%, French trade balance deficit in France was €1b deeper than expected to -€5.2b. Italian unemployment was as high as expected, increasing by +0.1% to 11.6%. EURUSD cannot care less and is still a tad up, trading around 1.0725. Later today, UK Manufacturing Production (+0.2% expected): will we see a Brexit effect? Meanwhile, arguments in the Supreme Court are still undergoing, there is strong case on both side and no-one can make its mind up of where it is heading. GBPUSD is under pressure since yesterday and is back below 1.27, trading around 1.2625.