Yesterday funds sold 8,500 Corn and 4,000 Wheat while they bought 9,000 lots of Soybeans in another day of Soybeans behaving the opposite as Corn and Wheat. Indeed, Soybeans settled up +5.25 cents and Corn was down -5.50 cents. Wheat was down -8.75 cents in Chicago, -7.25 cents in Kansas and -3.25 cents in Minneapolis. MATIF was contrarian, but the lower euro is clearly helping and maybe a bit of MATIF basis deals for Algeria were covered. MATIF ended up +€1.75 while CME EU was up +€1.25. Market are a bit lost these days between heavy supply, strong demand, macro situation,… The US weather is failing to provide some support (a cold snap is forecasted) and on the other side South American weather is getting better.
US Export Sales were pretty good across the board, it’s probably what helped Soybeans as the longer term perspective is clearly pleading for an increase in exports (despite NOPA Crush falling below expectations) while market was more focus on stronger US dollar as far as Wheat and Corn are concerned. Wheat export commitments reached 564.3kT, corn 1,540.1kT and soybean a very good 2,404.9kT, export inspections are going to be busy again, watch out!
November NOPA Crushed fell short of the expectations to 160.752M bushels but market was kind of greedy and it is still a very good number, +3% higher than November 2015.
Night session is technically reverting on Soybeans, -3.50 cents, Corn is a couple of ticks down or so in a typical Friday mood fashion. Wheat is a bit messy, down -3.50 cents in Chicago, it’s a cent better in Kansas which is now 5 cents at premium, while Minneapolis is up a couple of cents. Still a lot of clean-up needed there. MATIF is flattish, gone in week-end already, while CME is flat on the front month and up +€1 on K7.
Informa is cutting US acreage for next season on corn by -4.159M acres (-4.41%) and on wheat by -2.929M acres (-8.09%) while they those it on Soybeans by +5.244M acres (+6.27%). The switch from corn to soybeans can apparently be felt in the seeds orders and make sense, in oversupply on both of the commodities, soybeans seems better valued and also the use is likely to grow more than corn. As per wheat, waiting for spring will draw the full picture, tough to imagine that US farmers will let go 1.844M acres (cumulating wheat, corn and soybeans) considering the low price situation, it’s more likely they want to wait for spring to leave them some more choice and flexibility, price dependent.
Stratégie Grains guesstimate of the next crop is there: soft wheat would be at 145MT with 37.7MT in France, 25.7MT in Germany and 10.7MT in Poland. However, last season shew it can change very quickly very late into the season so estimations that early are always to be taken with a cautious approach. Corn and barley are both seen at 60.9MT.
South Korea private fisheries are looking to buy non GMO soybeans, 90,000T. South Korea Kocopia bought 60,000T of Corn, most likely US origin. Algeria is said to have paid a couple of dollars below $200, up to almost 500,000T. But it’s always tough to now the real deal as no official results are published.
On freight, 10th sessions in a row down for Baltic Dry Index BADI which is now back below 1,000 after decreasing by -37 yesterday, with -20 today it’s now at 946. Today, the driver was lower demand on midsize vessels, Panamax index taking a hit of -8.75%. Oil is on the rebound today but it is still very unconvincing considering the fundamental potential. Market seems it will believe it when it sees it. NYMEX Crude is trading just below $51.50 and ICE Brent just below $55.
US CPI and Core CPI were as expected to +0.2%, Philly FED Manufacturing Index was way above expectations to 21.5 (9.1 expected) and unemployment claims were better than last week, decreasing by -4k to 254k. EURUSD is struggling with all these news and is currently trading around 1.0425, more and more market is talking about parity. First quarter of 2017?