Wheat galore! All was going fine until GASC line up scared everyone: 1.235MT of wheat was offered, including 995kT from Russia only, basically 1.28% of the record crop offered in the same tender, this is quite big. Best Russian FOB was $193.93. In comparison, other origins were light: a single offer of Ukraine ($194.00 FOB), two from Romania (best FOB $198.99) and a single French ($198.69 FOB). GASC booked 295,000T of Russian wheat at an average of $208.75 CNF and 60,000T of Ukrainian wheat at $210.23 CNF (making the total purchase of 355,000T at $209.00 CNF). It will be tough to compete with Russian wheat with such values, French wheat has to worry. However, loadings are going well on French ports as 1212.15kT of wheat are currently loading in Rouen to Algeria. But if one days Algeria get over its broken grains and bug damage fears of Black Sea wheat, this will be another game changer.
Busy day on the international scene: Chinese seasonal delegation in the US signed deals for 3.8MT of soybeans for $1.56b. However, on the sell side, they are still struggling getting rid of their aging wheat stocks as the auction only saw 17,691T going out of the 1.21MT offered. Tunisia bought 100,000T of wheat between $190.99 and $193.74 CNF but made no purchase on barley. Jordan made no purchase on the wheat tender, as usual: tough tender specs. They reissued the tender. Finally, Saudi’s SAGO is tendering to buy 480,000T of hard wheat.
Despite this strong activity, market got scared and the initial rebound more or less vanished and actually it ended up being in a selloff, especially on Wheat as Chicago closed down -10.25 cents. Kansas followed with -7 cents while Minneapolis lived its own life with +15.25 cents (closing at a premium of 254.25 cents to Chicago). MATIF closed down -€0.75 cents, CME EU flat and London Feed +£0.55. Soybeans were flat on the close and Corn down -2.75 cents. Funds sold 7,500 Wheat, 7,500 Corn and bought 2,000 Soybeans.
One more time, night session is trying to retrace, we’ll see how sustainable that is! Soybeans are trading up overnight +4.50 cents, Corn +0.50 cent and Wheat +0.50 cent.
US Crude Oil inventories went down quite a lot, -8.9M barrels, much more than expected (-3M barrels), that’s 7 weeks in a row for a total of -42.7M barrels. It failed however to support prices as NYMEX Crude is trading just above $46.75.
FOMC minutes showed some doubt is casted over a third interest rates hike as Governors are split and some think patience are needed due to low inflation. EURUSD is trading just above 1.1760, GBPUSD above 1.2875 and GBPEUR is now well established below 1.10, trading around 1.1060.