Sounds like US woke up with a hungover and yesterday was a tough ride: -13.75 cents on Soybeans, -1.25 cent on Corn and -7.25 cents on Wheat in Chicago (-5.75 cents in Kansas and -14.25 cents in Minneapolis). We’re entering the dull fundamental period and there is nothing to support the market really. So why buy? Funds are short Wheat and Corn, are long against fundamentals on Soybeans, while northern hemisphere crops are done and dusted, new crops, well we don’t know anything yet about them (although a bit wet) while weather in South America is not concerning. So why buy indeed? On the other side of the pond, there is not a day with a reminder that Russia is changing the game. But the most worrying thing for the western European markets is that it could just be the start: there is still a lot of arable land and yields increase potential is significant. MATIF Wheat was down -€1.00 and CME EU was flat. In the UK, farmers are still in disbelief but it seems it’s a question of time that some will admit the insularity won’t protect them: there’s enough wheat for everyone and when the farm retention will stop, it could have a devastating effect on both cash premium and London Feed 9which closed down -£1.15).


Night session is quiet, Soybeans ‘dead cat bouncing’ +2.00 cents, while Corn and Wheat markets are more or less down two to three ticks. European markets are expected flat so far on the open.


The CFTC COT was all over the place to be honest, and it doesn’t even include the USDA WASDE report. Funds were supposed, according to Reuters, to have bought 7,500 lots of Wheat. They actually sold 14,210 lots to increase their short position to 125,085 lots. Funds were supposed to have sold 4,000 lots of Corn, they sold only 2,861 lots, increasing their short to 205,624 lots. Finally, they were supposed to have bought 13,000 lots of Soybeans, they bought only 6,123 lots, increasing their long position to 46,738 lots. The truth is it is becoming increasingly difficult to assess the funds volume, with no floor (and the remaining options guys on the floor are pushed upstairs) and the fact that a lot of commercials do not hold separate clearing account for hedging and spec. From Wednesday to Friday, funds were expected to be seller of 19,000 Corn, 6,000 Soybeans and buyer of 8,500 Wheat. Yesterday, they sold across the board, respectively 7,000 lots, 9,500 lots and 6,000 lots.


US crop is reaching an end, the season is wrapping up. 83% of the corn is harvested, +13% week on week, still a good week behind average but it doesn’t really matter anymore. Soybeans are 93% completed, +3% week on week, just a tad behind average. Winter wheat is more or less in the ground, at 95%, on line with the average. And conditions are decent (a tick down week on week though) with 54% G/E (59% last year) and 11% P/VP (9% last year).


US exports inspections were to put back into perspective with USDA raising wheat exports by +0.68MT (to 27.22MT) and corn exports by +1.91MT (to 48.9MT) while soybeans exports remained unchanged at 61.24MT. Wheat shipments were small… Very small! Just managing to be above 300kT to 301.0kT, bringing the total for the season to 11.7MT. Where the bug is, exports are set to decrease by -1.5MT year on year, but it’s already behind -0.7MT and the first part of the season is supposed to have a positive momentum. The target is 43% completed, on average it is 48%. That being said, last year was 43% also so no panic yet but the raise of exports in the USDA WASDE is quite intrepid. Corn shipments were weaker than last week with 375.95kT, reaching 5.928MT this season, this is to compare to 10.862MT last season. Here also there’s a potential bug, -4.934MT after 2.5 months (20.83% of the year) while -9.34MT year on year is expected? 52.83% of the decrease is done during the first 20.83% of the year, strong shipments are now compulsory to keep the target realistic, and this increase of corn exports is seriously puzzling at this stage: 12% of the target is completed versus 19% last year and 17% on average. Everything cannot be bad at the same time, soybeans shipments were strong, still above 2MT to 2,087kT. But nothing super fancy to be honest, it is now a cumulated 16.956MT since the start of the season, -2.3MT compared to last year… While year on year exports are set to raise by +2.08MT, so it need to keep strong, very strong! Especially compared to last year where at this stage 33% of the target was completed, it is now only 28%! But still above the average of 24%, so a data to keep under scrutiny for sure.


Chinese Industrial Production was a tick below estimates to +6.2%, Fixed Asset Investments to +7.3%, as expected, while Retail Sales were half a percent lower than expected to still +10%. Chinese officials said “Overall Economic Performance Continued to Stay Stable with Sound Momentum in October” while ZeroHedge said “Economic Slowdown Accelerates”. German Preliminary Quarterly GDP was better than expected to +0.8% (+0.6% expected) while monthly CPI was flat. Inflation data later today for the UK, 3.1% expected on the CPI. US PPI expected at +0.1%later today. EURUSD is starting the day in a good fashion, back above 1.17, GBPUSD is trading around 1.3115 and GBPEUR cross rate around 1.12.

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