An unconvincing higher day: Soybeans closed up +4.25 cents, Corn down -1.50 cent, Wheat up +3.75 cents in Chicago, +2.50 cents in Kansas and -1.50 cent in Minneapolis. On the other side of the Pond, MATIF Wheat ticked down, London Feed ticked up. Funds bought in Chicago 2.500 Wheat, 4,000 Soybeans and sold 6,500 Corn.
Night session is strong across the board, Soybeans up +3.25 cents, Corn +1.25 cent and Wheat roughly +1.00 cent across the markets. On the other side of the Pond, week-end ode has kicked off, MATIF Wheat is very quiet, a tick up and down here and there and London Feed is -£0.40 down.
International Grain Council (IGC) has shot first for the ‘new-new’ wheat crop (2018/2019): 742MT, this is -1.98% compared to the latest USDA WASDE ‘old-new’ crop (2017/2018), so it would not change the global wheat situation, ample supply, ample stocks. For the 2017/2018 crop, they adjusted their estimates to 757MT, more or less matching USDA WASDE. For corn, the current crop is pegged at 1,054MT (they raised their estimates by +14MT), it is almost +9.5MT above USDA WASDE, so maybe the bearish surprises of the WASDE are far from being over!
Algeria has bought between 75,000T and 100,000T of durum, between $300 and $305 CNF.
Nine is the digit of the day. Indeed, it’s been 9 weeks in a row US Crude Oil Inventories are going down. The withdrawal was greater than expected with -6.9M barrels (-1.4M was expected) and since 9 weeks, it’s -46.3M barrels. However, with 412.7M barrels in stock, there’s no shortage, and it’s right in the middle of the usual range for this time of the year. But market is not massively impressed, NYMEX Crude is trading lower, around $63.30, ICE Brent at a $5.30 premium.
Yesterday, US Building Permits were a tad higher than expected with 1.30M (expected at 1.29M). Philly FED Manufacturing Index was lower month on month and lower than expected with 22.2 (expected at 24.9, 26.2 previously). UK Retail Sales were quite ugly, with -1.5% for the month of December which includes Christmas. The disappointing reports coming from the high streets since Christmas was indeed pretty bad, and -0.8% was expected, so this was much worse than expected. Previous (November) was also adjusted down from +1.1% to +1.0%. Amazon is to blame apparently. Until when? Amazon is above $500b of market capitalization. With a profit of a bit more than $2b, the PER is more or less 200. If results aren’t growing, going back to a more normal PER (let’s take 20) implies the stock should be down by -90%. When this equity bubble will burst, there will be a lot of blood in the street… Anyway, the lower trend of US dollar is still on, EURUSD is trading round 1.2775 and GBPUSD just above 1.3900 making GBPEUR cross rate trading around 1.1330.