Shorter week in the US as Thanksgiving was closed and Black Friday was a short session as traders were probably busy fighting over discounted TV’s at Target…Only MATIF and London Feed to entertain us on Friday, moving down in thin volume by respectively -€0.50 and -£1.15.
Over the week, the main mover was Wheat. The supply and carry over remain heavy and there’s no light at the end of the tunnel. The Russian radioactive wheat story failed to create a bit of panic… The only thing, GASC will for sure reject any radioactive ergoted wheat shipment containing poppy seeds… Joke aside, we’ll see on the next tender what’s happening. Anyway, Wheat moved down in Chicago by -2.69%, -1.78% in Kansas and -1.81% in Minneapolis. The premium of Minneapolis is 207.75 cents to Chicago and 209.00 cents to Kansas, at some point, this is hard to imagine an economic sense but market is always right… On the other side of the pond, MATIF posed a -0.63% loss in euro bur EURUSD rebounded +1.16% so this is a gain of +0.52% in US dollar. CME EU was flat in euro, +1.16% in US dollar obviously. London Feed Wheat was down -1.21% in British Pounds, only -0.28% in US dollar as GBPUSD rebounded +0.94%. Market is still feeling the pain of the Vivergo ethanol plant bringing the maintenance forward on uncompetitive ethanol margin and policy uncertainty. And market is starting to feel that if they have some troubles, what about Ensus? There is quite some uncertainty on the wheat demand at the moment. Market keeps going down, premium are softening, but there is still farm retention… At some point, the panic mode could be reach and it could be damaging for the farmers, especially if they start to sell all at the same time in the perspective of the end of January self-assessment deadline! Back to the week, relatively boring on the soy complex (+0.28% on Soybeans, +1.76% on SoyMeal and -1.45% on SoyOil) and corn (-0.22% in Chicago and -1.28% in MATIF in euros, -0.14% in US dollar). ICE Canola moved down -1.25% in US dollar (USDCAD was down -0.22%) and MATIF Rapeseed -0.77% in US dollar. NYMEX Crude rose by +4.24% over the week, OPEC meeting speculation is keeping going on…
CFTC COT was delayed on the holidays. Funds will be expected to be seller of 1,000 lots of Wheat on a week ending last Tuesday (it’s a bit irrelevant now but hey) and buyer of 23,000 Corn and 17,500 Soybeans. From Wednesday to Friday, it’s expected funds to have sold 6,000 lots of Wheat and bought 1,500 lots of Corn and 3,500 lots of Soybeans.
Egypt GASC is seeking sunflower oil and soybeans oil, no risk of radioactivity, ergo or poppy seeds… Boring! In Saudi, SAGO bought 723,000T of feed barley at an average price of $215.11 CNF. Iraq wheat tender is going on and Aussie wheat has the lead, with $283.35 CNF FO, six trading houses offered Canadian, US and Australian wheat. It comes in the context of Iraq also making highly transparent direct deals on the side… Taiwan flour mills booked 81,780T of US Wheat.
Night session is red across the board: Soybeans are down -0.75 cents, Corn -1.00 cents and Wheat is still suffering a bit more with -2.75 cents in Chicago. MATIF has also open down, front month trading down a couple of ticks. CME EU is flat, London Feed is down -£0.25.
Slow start of the week for the currencies: EURUSD flattish trading around 1.1930 while British Pound is posting a very modest gains as it is trading higher, GBPUSD reaching 1.3350 and BGPEUR trading around 1.1190. No major stats today, should be a quiet one, US New Home Sales (expected at 627k). Tomorrow should be funnier with UK Bank Stress Test, CB Consumer Confidence (expected at 123.9) and Wednesday, OPEC meetings are kicking-off and Preliminary US quarterly GDP will be released the same day (expected at +3.3%).