Market was clearly hungover yesterday and struggled to find some support. However, Chicago Wheat and Corn just managed to close in positive territory but most of the session was in the red. Soybeans continued to dip, closing down -5.50 cents, even if there is some scepticism on the USDA raising the yield, pressure was stronger and funds continued to sell, they sold 3,500 lots indeed. If we’re trusting the Reuters estimates (strong assumption here!), if they aren’t buying them back today, they will show a short position in the next CFTC’s COT. The rebound of Corn and Wheat (respectively +2 cents and +1.75 cents) is probably quite technical, funds taking profit of the some previously initiated short, buying respectively 8,000 lots and 2,000 lots. Minneapolis continued to suffer and closed down -4 cents and Kansas followed with -4.50 cents. There is some kind of mess in Wheat spreads, Kansas closed at discount of Chicago (-4.25 cents) and Minneapolis is still at a huge premium of +229 cents.


The doom and gloom mood contaminated Europe and MATIF Milling Wheat fell -€1.50. The question in France is: where all this wheat will go with another record Russian harvest? For sure, it will be a year with great competition, they will have to fight for market shares, there will be blood and tears for sure. CME EU also fell, printing a loss of -€2.75. In the UK, similar mood and market went down -£2.40. However, if the harvest is not late (yet), it started quite early (especially in England) and it’s going on and on and on… The Great British Summer is playing up!


US Export Inspections were pretty strong for soybeans, 570.0kT, raising the total for the soon ending marketing year to 55.6MT. USDA WASDE exports are pegged to 58.51MT. It will be a tight call for sure, especially considering exports were bumped up +1.36MT. Corn was slightly below than expected to 756.9kT, reaching 54.6MT so far this marketing year, USDA is pegged at 56.52MT. The last few weeks of the marketing year can have a positive seasonality so market expects current objectives to be met and maybe slightly exceeded. No surprise on wheat with 511.5kT inspected, 6.17MT since the 1st of June: this is a strong start, 23% of the USDA target is completed already, this is to compare to 19% last year and 20% on average.


Finally to end up this busy Monday, the crop report! Spring wheat harvest increased to 40% (16% has been harvested in a week) and conditions of those remaining are showing a mixed profile: 33% G/E (+1% from last week, last year it was 66%!) but 44% of P/VP (+1% from last week). Corn conditions improved to 52% to G/E (+2% from las week, last year it was 74%!) and 12% of P/VP (-1% from last week). Finally soybeans worsened: 59% G/E (-1% from last week, last year it was 72%) and P/VP remained unchanged at 12%.


Night session is down across the board: -2.50 cents on Soybeans, -3.50 cents on Corn and -3.50 cents on Wheat (no major movement on spread overnight). MATIF has opened lower, trading down -€0.50, CME EU flat line, and London Feed trading lower -£0.60.


China sold 6,632T of local wheat stocks in an auction out of the 3.03MT offered, this is a great rate of success. Even better with the imported wheat auction… None was sold. Irony aside, with 127.59MT in stocks at the end of the new crop year, this will become an issue as some will have to be written off at some point. This is why, in S&D analysis, accounting for China needs to be done with caution.


Jordan is seeking for 100,000T of barley for December shipment.


Yesterday bad set of macro data: Chinese data missed expectations as Industrial Production was +6.4% year on year (+7.1% forecasted, +7.6% previous), Fixed Asset Investments were +8.3% (+8.6% forecasted, +8.6% previous) and Retail Sales were +10.4% (+10.9% forecasted, +11% previous). This is still some outrageously high numbers though. The real bad data of the day was the EU Industrial Production, -0.6% month on month, a bit of summer seasonality. This morning, preliminary German quarterly GDP missed expectation by a tick to +0.6%, but previous was raised from +0.6% to +0.7%. UK inflations was lower than expected for the second month in a row as the July CPI year on year was released at +2.6%, a tick below expectations (same thing for core CPI – ie, excluding volatile food, energy, alcohol and tobacco – released at +2.4% versus +2.5% expected). So lower EURUSD (trading just above 1.1750) and lower GBPUSD (trading below 1.30) to start the day and GBPEUR cross rate is now established below 1.10.

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