Four in a row. A 4th session up on Soybeans, H7 ending up +5.75 cents to 1,075 cents. The recurring theme is the same, floods in Argentina. There’s a lot of speculation, but local sources says -1.5M to -4MT on the Argentinian crop would be possible. Lower amount of precipitations and higher temperatures could give a bit of a relief. Corn and Wheat ran out of steam and failed to follow, the rebound feels a bit out of steam but if Soybeans are keeping putting pressure, the funds that carry the lowest short will begin to feel the pain. Wheat ended down -2.50 cents while Corn was just down half a cent. Funds bought 2,000 lots of Corn, 8,000 lots of Soybeans and sold 2,000 lots of Wheat. Kansas was ticking up, taking its premium to MATIF to +21.25 cents while Minneapolis rebounded after the selloff, +7 cents, taking its premium higher, +142.50 cents to Chicago and +121.25 cents to Kansas. On the other side of the pond, MATIF was down -€1.00 while CME EU went up +€0.50.
Night sessions is down overall across the board, -3.50 cents for Soybeans, Corn is just ticking down while Wheat is down -2.25 cents in Chicago and -2 cents in Kansas. However, Minneapolis is still strong, with +1.25 cent. MATIF and CME EU are down respectively -€0.50 and -€1.50. Not much development overnight to be honest.
Stratégie Grains is already tossing the coin, taking the bet there was winter kill in Europe while wheat is still in dormancy. They are cutting their soft wheat estimates by -1.2MT to 143.8MT, it is mainly coming from Czech Republic, Slovakia, Lithuania, Bulgaria, Poland and Romania. Still, the expect an increase of +5.81% from last year. Early estimates are always very tricky to make.
Jordan has scored… Not the player… The country. Not 23… But 50kt! Easy puns aside, they booked a cargo from Casillo at $207.50 CNF. The tender specs are still very tough and the penalties on specification differences are still very punitive. Tough execution, so it’s not attracting a lot of offers and not a great aggressiveness in prices. Japan bought 117,605T of food wheat from US and Canada. Morocco’s ONICL has awarded 390kT of EU soft wheat import licences as part of preferential tariff.
Oil traded yesterday with a $50 handle, it’s now well expected that US Shale Gas operators won’t have any pity for OPEC and will increase production as more and more found new profitability. OPEC is adamant everyone is complying with the deal. NYMEX Crude is rebound today and is currently trading above $51.50 with ICE Brent at $2.75 premium. Crude Oil Inventories tomorrow. On Freight, Baltic Dry Index BADI has drastically reduced its year to day losses and was published at 952 yesterday, up +30 day on day, reducing the loss since the start of the year to -0.94%. But today it’s back down with -10 to 942 on general softer demand.
EURUSD was lower yesterday, reacting to FED’s Yellen speaking, confirming there will be several rates increase every year until 2019. Well it’s not the first time they are saying this and so far, twice a year hasn’t happened in 2016 and hasn’t happen in 2015. So, please allow us to be sceptical Janet! Main event of the day will be the Trump’s inauguration speech, it can create a bit of nervousness on the market. And on top of this, ECB Press Conference (they left rates unchanged, will keep buying bonds at a €80b pace until March to decrease it to €60b until the end of the year), Philly FED Manufacturing Index, US Unemployment claims… Fasten your seatbelt, just in case, better safe than sorry! EURUSD is rebounding so far today, trading around 1.0675. GBPUSD also corrected yesterday and after starting the day above 1.24, it finishes bed below 1.23 but is has rebounded today and is trading currently above 1.2325.