It really seems like market cannot really care about the weather: there’s a so called ‘bomb cyclone’ and East Coast airports are closing, shark are dying frozen, even in Florida, iguanas are falling frozen from trees (in full hibernation mode), but Wheat, Corn and Soybeans markets aren’t panicking just yet, and with a such short on board, this is quite interesting. However, real test will be on Monday where more or less all the traders will be back at work. Cold is one thing but snow cover is another thing: it’s obviously not as straightforward and linear as this but the thicker the snow layer is the longer the wheat can survive (or the lower temperatures it can bear). There is also huge buffer of wheat stocks worldwide so market is not in panic mode just yet but it is going to be a long and stressful winter for sure! Wheat moved down -2.00 cents in Chicago, -1.25 cent in Kansas but bounced back on Minneapolis with +8.00 cents, pure spread trading as premium is on its way back to 200 cents (193.75 cents over Chicago, 188 cents over Kansas). Soybeans were down a couple of ticks ad Corn down -2.00 cents. On the other side of the pond, no much excitement, CME EU is desperately flat, with an OI of 12 lots, it’s seems now that in May it will be delisted. Shame, idea was great, but probably it hits the reluctance of operators and maybe a bit of borderline storage arbitrage… We’ll see if Euronext is more successful with the warrants on the Rouen interland. MATIF was down a couple of ticks and London Feed was down -£0.50.
In Chicago, funds sold 5,000 Corn, 3,000 Soybeans and 2,000 Wheat. CFTC is due to meet to address risks on cryptocurrencies like Bitcoins. It’s not expected they are going to block the futures contracts but for sure, volatility is an issue as well as the fact it’s an underlying market that sees more or less two operators trading with huge hacking and reliability issues: speculators and criminals.
Night session is strong on Soybeans with +4.00 cents, Corn is ticking up, Wheat down -1.50 cent in Chicago and Kansas while Minneapolis is down a couple of ticks on the front month but curve is up a tick. European markets are expected flat so far.
Algeria bought at least 390,000T of wheat between $209.25 and $213, a big chunk of French probably (Black Sea not accepted… But for how long?) and maybe a couple of Argie vessels.
Bigger withdrawal than expected on the US Crude Oil Inventories, -7.4M barrels. With the weather, it is not surprising to see energy consumption higher. NYMEX Crude is trading just below $61.50 with ICE Brent at a $6 premium.
UK Services PMI was an insignificant tick better than expected to 54.2, ADP NFP was better than expected to 250k (191k expected, 185k previously) but US Unemployment Claims were higher than expected to 250k (241k expected, 247k previously). EURUSD is still in a fighting mood with 1.20, regardless of any stats, and is currently trading just below 1.2050. GBPUSD is trading above 1.3525, GBPEUR around 1.1230.