Sounds like it was some kind of ranging action. Soybeans went down -2.00 cents as well as Corn while Wheat was up across the board: +3.25 cents in Chicago, +2.50 cents in Kansas and +0.75 cents in Minneapolis. More convincing move on the other side of the Pond with MATIF up +€1.50 despite another expected GASC failure (although Algeria the other day was probably a traditional success), +€2.00 for the CME EU and +£1.60 on London Feed, European action very likely to be short covering. In Chicago funds bought 3,000 lots of Wheat and sold 7,500 lots of Corn and 1,000 lots of Soybeans. It was the weekly CFTC’s COT cut off so market will look for a week on the sell side for Wheat and Corn, with funds expected to be seller of respectively 4,500 lots and 8,000 lots while they will be expected to be on the buy side of Soybeans for 1,500 lots.
Night session is gently down on Wheat and Corn both -1.25 cents in Chicago. Kansas Wheat is resisting (-0.50 cents) and Minneapolis keeping its head out of the water with +0.75 cents. Soybeans are up +0.75 cents. Long story short, nothing major. MATIF is ticking down, CME EU is flat and London Feed -£0.15.
GASC received 14 offers: 3 from Romania (best FOB $204.99), 1 from France (FOB $209.90) and 10 from Russia (best FOB $197.95). Unsurprisingly, t showed that it was a Russian game and it is tough to see the situation changing anytime soon: GASC booked 180,000T of Russian wheat at $213.18 average CNF. Tough to compete indeed! Meanwhile, Tunisia bought 100,000T of durum between $286.29 and $289.69 CNF and 25,000T of feed barley at $209.55 CNF. Japan is seeking 109,906T of food wheat from US and Canada.
US Crude Oil Inventories are expected later today down -0.5M barrels as NYMEX Crude is trading back down towards the $50 figure, ICE Brent still with a high £5.50 premium.
Interesting development in Spain. The King basically addressed the Nation (it usually never happens other than Merry Christmas and Happy New Year) in a bid to save his Kingdom, accusing the Catalonia leaders of ‘unacceptable disloyalty’. Well, it’s not going to be quite enough to solve your issue Pepito, Catalan leaders are ready to proclaim independence within days: potential situation there… Especially considering the Spanish police seems to have been keen on using force during the referendum. And should it lead to an actual independence (peacefully or the tough way), it will be interesting to see in the middle of the Brexit process and will trigger some interesting talks about the EU membership on an independent Catalonia. For sure EU do not need this at this time (well, neither does Spain). However, EURUSD is unimpressed and is still trading above 1.1750: Service PMI’s were as expected, apart from Italy (below) and Spain (above). ISM Non-Manufacturing expected at 55.5 and NFP at 131K. In the UK the Conservative party convention tried to play the unity around the Brexit plan with still Boris Johnson trying to steal the show to MP Theresa May. Meanwhile, UK Service PMI was higher than expected to 53.6. GBPUSD is trading just below 1.3275, while GBPEUR cross rate is above 1.1275. Still in the UK, Tesco published good results. Sales are up +3.7% but profit up +71.8%. if there’s a bit of catch up following the accounting scandal, it also means that it is margin driven. Price and margin improved, interesting to point considering Brexit is blamed for inflation. With that perspective, not sure raising the rates is a good idea as consumer will be hit with a double whammy. Mark Carney, if you read those lines…