Another day of (light) pressure on Soybeans, ending down -3.50 cents. Under $10.20, it would make the $10 level very attractive technically. Funds sold 5,000 lots yesterday and some might suffer so a couple of stop loss just below 1,020 cents could drag the market down indeed to $10. There was a bit of spreading action with Corn, ending up +1.75 cents, funds buying 6,500 lots, still on the prospect of less corn planting in the US, but if Soybeans continue to slide, correlation will certainly kick off and prevail. Market was also pleased by President Trump commitment to the Renewable Food Association. But the star of the day was Wheat again, nothing much really. Pretty busy on international tenders, and a bit of weather concerns, Chicago rebounded 5.25 cents (funds bought 5,500 lots), Kansas followed (+5.50 cents) but Minneapolis struggled in comparison with +1.50 cents, and slowly but surely (and fairly) its premium is reducing, it closed at 85 cents to Kansas and 101.50 to Chicago. MATIF rebounded +€1.25, maybe on some delusional traders thinking French wheat would make it to the GASC! Joke aside, euro weakness and higher US markets did not leave much choice.
Night session is weak across the bboard with Soybeans down -3cents, testing the sub 1,020 cents level. Corn is just ticking down, as well as Wheat in Chicago and Kansas. Minneapolis is ticking up as the premium has been hammered, it’s not surprising to see it taking a breather. But still a lot of cleaning is due to happen. MATIF is up again today, with +€0.75 cents. A few French operators are bullish but one has to be careful not to fall in love with his position, this could just be wishful thinking…
GASC was back indeed and decided they could pay up to $210 CNF and booked 6 vessels again, 360,000T at an average of $208.65 CNF. Out of these 360,000T, 300,000T will come from Russia ($208.69 CNF average) and 60,000T from Ukraine ($208.45). Russian wheat is now accounting from 3.345MT this season, 73% of the supply. This season, the average price paid by the GASC is $194.47 CNF on a 4.6MT quantity, 73% of which being Russian. With 4 month to go into the season it’s very likely they will exceed the last year’s 4.711MT and they are on their way to exceed 5MT.
Oil is still on the range, NYMEX Crude is trading above $54.25 and ICE Brent with a $2.30 premium. Crude Oil inventories could be a troublemaker later today as it is expected to show a build-up of 3.4M barrels.
The main macro event of the day was the FOMC minutes, the main takeaway is that the rate hike may happen “fairly soon” as job market and inflation are “in line with or stronger than their current expectations”. EURUSD is trading below 1.0550, GBPUSD slightly above 1.2450. US Unemployment Claims are expected at 242k later today.