A profit taking day on Soybeans, closing down -9.75 cents. Drier Argentina also helped, adding a bit of pressure. Corn was unimpressed and pretty boring, just ticking down on the close. On Wheat, the spread mess is keeping up well, Chicago was up +5 cents, Kansas only +1.75 cents, and Minneapolis down -4.25 cents. In Chicago, funds sold 5,000 lots of Soybeans and bought 4,000 lots of Corn and 3,000 lots of Wheat. On the other side of the pond, MATIF ticked up while CME EU was up +€2.50 bringing the premium to MATIF to +€6.75. Seems like a lot of operators in France need a better season while the paradox is that an awful season has not been particularly beneficial for farmers.
Night session is bullish across the board, Soybeans are reverting most of the move of yesterday with +7.25, very technical market, very moody and weather driven obviously. Corn and Wheat are quite shy, just following with respectively +0.75 cents and +1.50 cent. MATIF and CME EU are expected flat at the opening so far.
Soybeans harvest in has started in Brazil, it’s 2% completed and quite early, especially in Mato Grosso: it has started really well with 11.5% (+6.2% in a week) and early, it’s in front of last year (3.7%) and in front of the 3 year average. USDA sees 104MT, AgRural 103MT. The next five days are going to be wetter so it should slow down the pace and slowdown corn planting but more in the south, in Argentina, it’s getting finally much drier.
EU Crop Monitor MARS is out and confirmed that the frost damage is relatively low even if the first half of January was the coldest since 1975. However, they pinpointed that the risk is still on in France, the UK, Denmark, and Benelux.
US Export Inspections showed the same pattern again and again on Soybeans. The seasonal negative momentum is right on, 10th week in a row it’s decreasing, to a still good 1,290.8kT. Only 582.5kT are needed on average per week, that should be more than fine and an increase in US soybeans exports is more than likely. For corn, 3rd week in a row with a better number, it seems like soybeans negative (but normal) seasonal momentum is leaving some room there: weekly shipments totalized 963.9kT, 1,147.2kT needed for the next 32 weeks, this is a big number, but still, right on target with the long term seasonal average (with 32 weeks remaining, usually 65% of the corn remains to be exported, we are spot on) and anyway, last year demonstrated that 77% of the target could be done the last 32 weeks. So no worry at all just yet. Wheat is another story. We are now officially behind the long term seasonality, but still in line with last year. Indeed, 62% of the target is now completed versus 63% on average and 62% last year. This this the 3rd time in the last 10 weeks that weekly shipments are below 300kT (this week 276.2kT) and now 530.2kT are needed in the next 19 weeks, the end of the season is approaching faster than we thing and still 10.074MT are left to be shipped.
Bird flu is coming back in the headlines: 700 birds died in Bangladesh and 3,000 were subsequently culled. Also in Germany, 45,000 turkeys were culled. Nothing to compare yet with the 26 million birds lost in South Korea, a couple of hundred thousand in Japan and a few handfuls official cases of human contamination in China. US has found one wild mallard duck contaminated but nothing more at the moment.
One of the first economic action of President Trump was to withdraw US from the Trans-Pacific Partnership deal. Japanese Yen went down back to around 113 but the extent of the move is actually quite modest, but US dollar was indeed generally weaker against the major currencies. Flash PMI’s today in France, Germany and EU as well as Flash Manufacturing PMI un the US. But watch out the UK’s Supreme Court Ruling! EURUSD is trading just below 1.0750. and GBPUSD around 1.2475.