Seems like market finally takes a breather, it ended on a mixed note indeed with Soybeans up +1.25 cent, Corn down -4 cents, Wheat up +1 cent in Chicago, -1.25 cent in Kansas, -1.75 cent in Minneapolis. On the other side of the bond it rebounded sharply: +€2.00 on MATIF, +€1.50 on CME EU and +£1.00 on London LIFFE.


This MATIF rebound would suggest that French wheat will go to Algeria. In theory, US wheat can compete and French wheat is too high, but French operators are keen on selling at discount to Algeria to keep the market share. OAIC is buying very recurrently $5 to $10 below replacement value indeed so there’s no reason for them – yet – to accept Russian wheat in their specs. Meanwhile, Sovecon raised its Russian wheat estimates by +1MT to 78.9MT (USDA pegged it to 77.5MT). Bigger crop is getting bigger!


In Chicago, funds sold 10,000 lots of Corn. It means that very likely, funds are now short Corn. This is a big move as they’d be short of Wheat, Corn and Soybeans. Funds sold also 4,500 lots of Soybeans and bought 1,500 lots of Wheat.


Farm Journal Midwest Crop Tour Day #3!


  • Illinois Corn: 180.72 vs 193.5 last year (-6.60%), 187.37 for the 3 year average, USDA WASDE at 197.
  • Illinois Soybeans: pods count on 3×3’’ square 1,230.77 vs 1,318.09 last year (-6.62%), 1,269.24 for the 3 year average.


The negative bias versus USDA is still on, Illinois Corn yield is -8.26% below current USDA WASDE. It’s really going to be interesting to see the national yield, they won’t get away with a tiny little cut, their credibility is at stake. And also, the difference with the final USDA yield will be very interesting to compare… Methodology of the crop tour may just reach its limit… On the other side, scouts are widely telling they were expecting much worse looking fields. So tough to make a call!


Iowa still needs to be completed, but so far sees surveyed district down between -1.80% and -4.04% (average -3.03%). Bust last year those districts were drastically underestimated compared to actual final yield, between -0.02% and -9.39% (average -6.94%). For Soybeans, pod counts of districts surveyed are down -15.31% compared to last year, with an average of 1,092.77, last year pod count was 1,224.28… And those districts ended up outperforming the state yield last year. So this is a serious warning.


Model so far 163.24/165.32 for corn (165.32 would be -8.87MT) and 49.15/52.15 for soybeans (49.15 would be a cut of -0.61MT).


Night session is showing a firmer rebound overall but still not very convincing: +3.75 cents on Soybeans, +3.75 cents on Wheat (Kansas in roughly in line while Minneapolis is up +5.75 cents). On the other side of the pond this was a very quiet start of the day, MATIF is up a couple of ticks but the curve struggles to be up, CME EU is barely ticking up and London LIFFE is flattish.


Japan bought 134,000T of wheat in tender, Iran is looking for 200,000T of soybean meal, Ethiopia for 70,000T of wheat (delivered in inland silos through Djibouti port, good luck). China sold 20,929T of wheat from its ageing reserve (5 years old for this one), still nobody wants it as it’s only 1.74% of the global offered amount. South Korea’s NOFI passed on the multi-meal tender wile MFG bought 60,000T of corn. Groundhog Day theme again today as Jordan cancelled and reissued Barley tender as only 2 offers were received… Tunisia is seeking 167,000T of milling wheat, meanwhile, we are still waiting for Algerian leaks. Iraq bought 50,000T of US and Australian wheat.


US Crude Oil Inventories showed the expected withdrawal of -3.3M barrels yesterday. NYMEX Crude rebounded and is retracing part of it this morning but it is now trading above $48. US Flash PMI were released at 52.5 (Manufacturing) and 56.9 (Services). US Unemployment claims were expected at 237k, actual: 234k. EURUSD is trading around 1.18. UK’s second estimates of quarterly GDP was +0.3%, as expected. GBPUSD is trading above 1.2825 and GBPEUR is now well established below 1.09 and more and more are talking about parity.

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