A stronger Friday that was, to end up a week where a lot of traders have sweat… And gamma traders might have leave for the week-end with a smile on their face! Soybeans ended down -1.25 cent while the rest was green across the board: Corn up +4.25 cents, Wheat up +4.50 cents in Chicago, +5.50 cents in Kansas and +6.75 cents in Minneapolis… A breather after the crazy Thursday! Indeed, if on Thursday Soybeans were down a single cent, Corn was down -8.25 cents, but Chicago Wheat down -16.25 cents! Indeed, the Kansas WQC tour basically said that winter wheat yield could be 46.1 bushels per acre… This is far from being the worst case scenario so far. Tonight ratings will be under scrutiny for sure! On Friday, funds bought 7,500 Corn and 3,500 Wheat and sold 3,000 Soybeans.
Eventful week indeed: ICE Canola was up +2.16% in US dollar, MATIF Rapeseed +1.40% in US dollar, the soy complex showed a similar strength with Soybeans up +1.75, SoyMeal +0.35% and SoyOil +3.75%. Corn was up +1.16% along the week, MATIF Corn +1.20 % in US dollar. Wheat was all over the place with Chicago up +2.31%, Kansas +2.92%, Minneapolis -0.09%, MATIF +0.92% in US dollar, CME EU +0.32% in US dollar and LIFFE Feed +0.90% in US dollar. EURUSD was up +0.92%, GBPUSD +0.25% and USDCAD was flat.
CFTC’s COT showed funds bought more Wheat than expected: they reduced their short position by 37,689 lots to short 124,638 lots. Reuters was expecting to see 16,000 lots of buying only. On Corn, Reuters was expecting funds to be seller of 5,000 lots. Nope. They bought 11,627 lots, reducing their short position to 184,630 lots. Finally, on Soybeans, funds bought 608 lots, reducing their short position to 47,667 lots. Reuters expected a purchase of 7,000 lots. So basically, all over the place! From Wednesday to Friday, funds were seen selling 4,500 lots of Wheat and buying 1,500 lots of Corn and 2,000 lots of Soybeans. This is still an aggregated short of 358,000 lots!
If tonight ratings and planting as well as Export Inspections will certainly give the tone for the week, there’s the USDA WASDE on Wednesday, with first data of the new crop, this is not usually the most accurate as a lot can obviously still happen but it will set the tone for the new season. Night session is quite eventless, on the downside though, with Soybeans down -4 cents, Corn, -1.75 cent and Wheat -4.75 cents.
Jordan is in for Wheat, 100ktT. Iraq has been offered wheat, best CNF FO is said to be US origin at $267.17.
On Oil, market is now widely expecting OPEC to extend the deal until the end of 2017. Considering price action, it’s not seen as a game changer by any means! NYMEX Crude is trading just above $46 while ICE Brent is trading below $49.
During the campaign, after what was widely seen as a bad mandate by political analysts (just based on unemployment, the number of unemployed people has risen by +19% during the Francois Hollande mandate), it’s like people were singing, with new hope and wishes for change, The Who’s song: “We won’t get fooled again”. And the song ends up by “meet the new boss, same as the old boss”. This song will celebrate its 46th anniversary soon… Scarily up to date! Emmanuel Macron, a leftish lib dem, has unsurprisingly won, he’s seen as being in the same line as Francois Hollande. EURUSD spiked at 1.1022 but retreated. If indeed he was probably the best candidate from a EU construction point of view, his elections won’t solve the structural issues. Also, the Parliamentary elections will decide more about the politics, and it’s going to be one more month of political shambles: some Socialist and Conservatives will hope to have their own majority while some of them will find in Macro a new friend. But Macron said it will be new faces… So t’s going to be very interesting to see the shamble in the parties and the early critics if Macron is taking on board old political figures from both sided of the political exchequer failing s soon as he start to keep his word. EURUSD is now reading below 1.0950.