A rebound to start the week with. It’s all about the stress of the WASDE and Iraq came to the (temporary) rescue of Wheat. Soybeans ended up +7.00 cents, Wheat +5.00 cents in Chicago, +3.25 cents in Kansas, +6.25 cents in Minneapolis. Corn however, just ticked down. In Chicago funds bought 3,500 Soybeans, 6,000 Wheat and sold 5,000 Corn. On the other side of the pond, MATIF Wheat ended up +€0.75, CME EU was flat and London Feed +£0.55.


To be noted, Minneapolis is back above 200 cents premium to both Chicago and Kansas. This is $2 more for 27kg! Meanwhile, in Alberta, to highest grades of hard wheat is said to be above the 5 year average.


Night session is quiet, Soybeans curve is modestly correcting, Corn a few ticks down, Chicago and Kansas Wheat down around 2.00 cents while Minneapolis is up +1.25 cents. European markets are expected flat so far.


Winter wheat (which is 91% planted, right on time, 75% has emerged, a tad behind) is starting the season on a fairly good manner, nothing fancy, nothing catastrophic: 55% are G/E (+3% from last week) and 11% are P/VP (-1% from last week). If it is a little bit below last year indeed (G/E 58% and P/VP 9%) that’s nothing to worry about and it is improving so everything is going into the right direction. Corn harvest is still going on, a bit behind schedule as 70% is completed (84% last year, 83% on average), but it is gathering pace (+16% in a week) and soon there will be only corn to harvest as soybean harvest will be behind us. Indeed, soybean harvest is reaching an end (90% is harvested), right on time, maybe a couple of days delay but that’s it. In other words, the yield published tomorrow by USDA will be very close to final yield, so market will have to give up its scepticism and finally accept the data.


So USDA WASDE tomorrow, what to expect? Corn yield should get closer to 173 bushels per acre, this could mean +2.5MT in the production. Market sees a conservative 172.4 busgels per acre on average, still +1.3MT of production. Soybean yields will very likely stay above 49 bushels per acre, something like 49.3 bushels per acre, meaning -0.50MT in the production but it will stay above 120MT. Wheat, watch out Australia and Russia.


US Export Inspections were big 2.49MT for soybeans, it is still in front of the seasonal pace. Indeed, 24% of the target is completed while it is 20% on average. However, same time last year was stronger with 28%. Will US manage to increase by +2.08MT the exports year on year? Nothing more sure… If no change is expected in this USDA WASDE, in a couple of months, the picture might be clearer and exporting 61.24MT might be proven optimistic. Even more true for corn as only 444.6kT were inspected. Despite a strong slowdown expected from ne year to another (US exports are currently pegged to 46.99MT, -11.25MT from the previous marketing year) it fails to gather some pace: indeed, 12% of the target is completed while it was 18% last year and would supposed to be 15% on average. USDA could decrease the exports further down sooner rather than later. Wheat is slightly behind average seasonality with only 284.3kT shipped: 43% of the target is completed versus 46% on average (but don’t forget some of the cross border data is not included) but it is better than last year (42%), so tough to imagine any change unless data is diverting drastically from the seasonality in the next couple of months).


In Brazil the soybean crop is 43% planted, this is in line with the average but behind last year that was pretty pacey. Weather conditions are mostly favourable these days in South America, a bit colder and drier but nothing alarming by any means.


Lower EURUSD this morning, trading below 1.1575. GBPUSD is below 1.3150 and GBPEUR below 1.1375. German Industrial Production was down -1.6% month on month, a contrast with Factory Orders that were higher yesterday with +1.0%.



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