Shy day on Soybeans and Corn: Soybeans moved up +1.25 cent while Corn was ticking down a couple of ticks only on the close on soon expiring Z6 while the curve was down more or less -2 cents. Wheat was messy as per usual but the move was more significant: collectively lower. Kansas wheat continued to dig further lower Chicago, the discount increased to 4.25 cents on the close as Chicago was down -3.50 cents and Kansas -5 cents. Minneapolis was quite roughly in line for once, with -4.75 cents. In Chicago, funds sold 5,000 Corn and 3,000 Wheat and bought 5,000 Soybeans. By the way, Tuesday was the CFTC COT cut off, market will look for funds selling 7,500 Wheat over the week, 3,000 Soybeans and buying 10,000 Corn. On the other side of the pond, MATIF Wheat was up -€2.50, the spread K6/H7 was bid nicely as it seems there’s not much big interest in going to the delivery as a seller considering 76 test weight could be more competitive to sell on physical market: Z6/H7 closed at -€2. CME EU closed hammered by -€3.25, with only 48 lots traded, bringing the open interest to 62 lots only… But 2,000T lots were delivered in the north of Paris, a Soufflet silo.
Night session is softer on Soybeans, correcting -6.50 cents, the 1,150 cents level is a technical tough one. Corn is ticking up with no major conviction while Wheat is collectively higher between +4 to +6 cents, mainly driven by the Indian story, the speculated fears of winter kills and technical rebound. MATIF is up again, +€1.50 on Z6 with some bid again on the spread.
Weather is cold in Russia, but the snow layer seems pretty well established. Also in the US, some blizzard is bringing some very oversize snow cover in the upper Midwest! This is quite anecdotic as it’s not covering any winter crops areas. Canada is also cold and some (those who are long…) are beginning to talk about winter kill.
Saudi bought 950,000T of barley earlier, they are now seeking 715,000T of hard wheat. Ethiopia is also seeking 70,000T of wheat. In India, government has scrapped the 10% import duty. It’s been a while that there was some doubts cast on the government production data and this could just be an admission that the allegations were true: India will need to import wheat, and quality, as they were hit by two drought in a row. Will it change the global picture? Probably not, there’s a lot of wheat (Australia will have even more than expected) and a lot of buffer. In France, according to custom data, exportations outside EU were down to 290,000T in October, down -15.80% from the month before. Season’s total is so far 1.8MT, -32% from last season, which is no surprise, it’s more or less the percentage loss of production.
US Crude Oil Inventories showed a greater withdrawal than expected with -2.4M barrels. This hasn’t provided any respite by any means to the market, slowly fading, and coming back below $50 in a clear ‘wait and see’ mood after the OPEC deal. NYMEX Crude is trading around $49.90 and ICE Brent around $53.25. On the Ethanol, a almost flat week in the sense that if production increased by +11,000 barrels per day to 1.02M barrels per day, stocks have increased by +82,000 barrels to 18.53M barrels. In other words, the surplus of production went in stock. On Freight, Baltic Dry Index BADI was down -24 to 1,162, this was driven by weaker demand on larger size vessels as Capesize index lost -6.39%.
In the UK, it’s becoming interesting… Is this Supreme Court hearing actually worthwhile? Indeed, parliament passed a bill forcing the Government to submit Brexit plan to them. This bill was pushed by the Labour party (quite logical) but had to be approved on the Conservatives benches. No a real sign of solidarity there… There’s a small redundancy now. If Supreme Court is giving green light to the Government to invoke Article 50, they will now have to go to the parliament. MP are saying they won’t oppose, what is the point then? Parliamentary battle will surely be intense and it’s tough to see the current calendar respected. GBPUSD is now below 1.27 but the hit taken was quite marginal actually. Even despite the fact the Manufacturing Production was down -0.9% month on month and Industrial Production decreased by -1.3% month on month. In EU, French final NFP was as expected to +0.3%. To follow today, ECB Press Conference and rate decision (status quo widely expected, but market will keep an eye about what they say about the bond purchasing program with Italy in the back of the mind) and US Unemployment Claims. EURUSD is in a good shape these days, after bear trapping short in the Italian referendum, it is slowly recovering and approaching 1.08, before FED next week.