Tuesday reversal myth busted once again as Soybeans were pretty close to pay a visit to the $10 level and finally ended down -16.25 cents to 1,005.25 cents. If Soybeans are breaking this support, it could produce some much more convincing downside movements on Corn and Wheat. Indeed, the downside is there (Wheat ended down -1.75 cent and Corn -3 cent) but it’s very unconvincing as the fundamental news flow is pretty poor. Indeed, not much to talk about actually, stronger US dollar seems to be one of the big driver here, coupled with technical and low volume approaching the holyday season. On the other side of the pond, MATIF just ticked up while CME EU was down -€1.
In Chicago, funds sold 5,500 lots of Corn 12,000 lots of Soybeans and 500 lots of Wheat. Being the CFTC COT cut-off, market will expect funds to have sold across the board during the week: 18,500 lots of Corn, 13,500 lots of Soybeans and 5,000 lots of Wheat. However, the Reuters estimates is far from being historically accurate.
There’s still some weather talks but it doesn’t seem US farmers are massively worry about the cold as there’s enough snow cover. In South America, it is wetter, could be better for sure but at least the patter is much wetter than a few weeks back.
Night session is showing some strength on Soybeans, a deserve breather: +2.75 cents. Wheat is down a couple of cents, while Corn is in the middle, barely ticking down. MAITF has open ticking down, CME EU still to trade.
So GASC was back, and was apparently in an uncomfortable position. Russian blamed currency for their offer, indeed FOB prices were supposed to have moved down and were expected to be much closer to $180 than they were. Argentinian wheat was so aggressive in FOB terms that even with the freight divagate they came first. A strategy would have been to book not much more than the two Argentinian offers but GASC probably thought that securing the supply was more important and purchased 360,000T out of the 600,000T offered. The two offers from Argentina were the best FOB ($173.50 and $173.00) and were respectively first and third in terms of CNF ($197.15 and $196.53, average purchase of the origin is $196.84 CNF). Best Russian FOB ($186.74) was in-between in CNF terms ($186.74). GASC booked two other cargoes of Russian wheat (both at $198.50, making an average CNF price of $197.88 for the origin) and the offer from Romania ($187 FOB, $197.75 CNF). So that’s 360,000T at 197.51 CNF average. From the beginning of the season, based on tender results, they are totalizing 2.94MT at $189.05 average CNF, Russia is still leader with 69%, followed by Romania with 24%, Argentina made its entry with 4% and Ukraine still stuck at 2%.
On the other side, GASC is struggling to purchase white sugar since October. They cancelled for the second time in arrow their tender. They received only one offer at $548 CNF. Apart from those, Taiwan bought 93,125T of US wheat. In India, the USDA attaché has put a number on the Indian story: +0.7MT of exports to 3.7MT. It won’t change the global supply glut.
On Freight, if Baltic Dry Index BADI was once again down (-13 to 914), there’s a small change of pattern: it was driven by Panamax index (down -5.88%) but offset by Capesize index (+0.48%), up the first time since 14 sessions. Meanwhile, on Oil, market is on the upside, bits by bits, taking back the correction post OPEC peak. Crude G7 contract on the NYMEX is trading above $53.50 and ICE Brent with a $2 premium. Market is expecting US Crude Oil inventories to show later today a withdrawal of -2.4M barrels.
EURUSD is battling hard with 1.04, it seems to be technically very sticky. Meanwhile GPBUSD is below 1.2350, bringing GBPUSD cross rate back below 1.19. Market are going quickly to focus on a very busy 2017: Brexit, French elections and German elections.