At some point it has to rebound. It did yesterday, Wheat finally did: +5.00 cents in Chicago and Kansas, just a little tick up in Minneapolis. Corn followed with +4.75 cents, Soybeans closed up +0.75 cent. Nothing much to say really. Funds bought 17,000 Corn, 2,000 Soybeans and 4,500 Wheat. On the other side of the pond, similar kind of day, MATIF Wheat rebounded +€1.50 and London Feed +£0.15.
The only concern is the level of short in the market, it could be a matter of who is going to give up first. On Friday and Tuesday, funds continued to sell Wheat market (CFTC COT will be expected to show funds sold 11,500 lots, taking the short to 140,500 lots) so the new short will be under pressure very quickly if rebounds sustains. For sure market needs a fundamental catalyst to enter in a clear bullish trend, and it’s not coming. So, as long as short are sticking to their guns, that should be fine. COT will be expected to show fund sold 9,500 lots of Corn on the week ending Tuesday (increasing the short to 232,000 lots) and bought 2,000 lots of Soybeans (reducing the Short to 90,500 lots).
Night session is quiet, Soybeans marginally flattish-up, Corn a couple of ticks down along the curve, Wheat is up around +1.00 cents across the markets. MATIF Wheat opened a tick up on old crop, a tick down on new crop, and now trades a tick down along the curve, nothing fancy. Meanwhile, London feed is still to trade.
Japan bought 91,733T of food wheat from US, Canada and Australia. Taiwan’s MFG is seeking 65,000T of corn and US corn seems to be on the lead at +144 cents CNF over Chicago K8. Iran is seeking 200,000T of feed barley. Tunisia cancelled the hat trick tender (wheat, durum, barley) for ‘administrative reasons’: official reason is that a senior official has been involved in an accident… South Korea NOFI bought 437,000T of corn and 65,000T of feed wheat.
Chinese GDP was a tick better than expected with +6.8%, Fixed Asset Investments and Industrial Production were also better than expected by a tick to respectively +7.2% and +6.2%. No Slowdown in China in a nutshell. The only ‘bad news’ was the Retail Sales, +9.4% ‘only’, it was expected with double digits (+10.1%, previously +10.2%). Later today, US Building Permits (expected to 1.29M), Philly FED Manufacturing Index (expected to 24.9), Unemployment Claims (expected to 250k),… Busy day! EURUSD is trading around 1.2215, GBPEUR above 1.3825 and GBPEUR cross rate is back above 1.13, trading around 1.1325. Summit between France and the UK seems to show some keeness from France to get the best Brexit (or the best non-Brexit) deal and to keep the special relationship at best as possible. Christian Noyer, former Governor of the Banque de France and Brexit envoy of French President Macron, said on BBC Radio 4 this morning that he’s keen on the UK changing its mind and remain, he expect London to remain the main financial centre of Europe and he’s keen on a Norwegian kind deal if all other conditions are met (which the UK is far from being OK to comply with, especially on the European Court of Justice jurisdiction and the free movement of people. Also expected today, US Crude Oil Inventories, expected to -1.4M barrels… Last time inventories grew it was mid November 2017! NYMEX Crude is trading higher, around $64, With ICE Brent at a $5.31 premium.