Only MATIF and CME EU yesterday and it was the kingdom of boredom. MATIF Front month volume was -25% lower than Friday! Less than 10,000 traded on the front month over 5 ticks… CME EU front month traded over 2 ticks, 77 lots only. For survival, there’s a need to push for more basis contracts to be done as they’ll secure a buy side, a sell side and an EFP. But tough to find a way to incentivise all the market participants at the same time.

 

US markets reopened with a bang, a bullish night session! Soybeans headed toward the biscuit break trading up +15.25 cents. The main driver is the wet Soybeans areas in Argentina, especially in the Santa Fe area. However, the most pessimistic downside is currently -1.5MT on the Argentina production, so it wouldn’t change the big picture… Should it be proven! But surely, after the winter kill theme of the northern hemisphere, this is now the hot (well… Wet!) topic. Corn and Wheat are both following behind in a lower extent, respectively up +4.25 cents and +5.50 cents. On the other side of the pond, MATIF is up +€1.25 and CME EU is just ticking up. Export inspections to follow later today.

 

Philippines is raising the amount of feed wheat they are seeking from 159,000T to 163,000T. Deadline tomorrow. Japan is seeking 117,605T of food wheat from US and Canada.

 

The British Pound is on fire! MP Theresa May said Brexit will be mean that the UK won’t be part of the single market but get free trade deal agreements. On top of this, the deal will be put before the Parliament for vote. Market feeling it’s bullish as it’s now clear that Theresa May has a better and firm idea on how she sees the Brexit, and parliament will have to endorse her. In other words, one can still think that it will be a good deal else the House of Common will block it. GBPUSD back above 1.2325, rebounding more than +2%. This is coupled with good year on year CPI (+1.6% versus +1.4% expected), Core CPI (+1.6% versus +1.4% expected), year on year Retail Price Index up +2.5% (+2.3% expected) and House Price Index year on year +6.7% (+6.3% expected). EURUSD is following in a lower extent, trading above 1.0675, German ZEW was lower than expected to 16.6. GBPUSD is obviously rebounding but is still with a 1.15 handle but is still far from the 1.20 touched in December.

2 thoughts on “Mid Session Comment – #Wheat #Corn #Soybeans – 17/01/2017 1.55pm GMT

    1. One cannot be wrong all the time! :p Joke aside it’s puzzling, I do not feel S&D justify a rebound. Lower US winter plantings? Yeah but what will happen in spring? Even, let’s assume -10.39% year on year also on spring wheat, with same yield this would be -6.53MT on the US crop, is this the end of the world? Last season, world market absorbed a cut of -15.69MT of EU crop, -5.78MT in Northern Africa and -1.34MT in China and world stock rose anyway by +12.80MT… As long as nothing is going wrong everywhere at the same time, it would take a few years to create a disequilibrium of the world wheat balance sheet. But anyway, this is kind of seasonal, after winter kill for winter crop, it’s now weather market of South America and wheat can be mimetic, following a rally on Corn and Beans. So to sum up, I’ll be careful on the upside on a short term but stay bearish on a longer term.

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