Technical Friday. Soybeans moved up +3.25 cents while the rest was softer, retracing at the end of a very active week: Corn moved down -1.50 cents Wheat -13.50 cents in Chicago, -9.00 cents in Kansas, -13.50 cents in Minneapolis. MATIF moved down -€3.75 and London Feed -£0.85. In Chicago, funds bought 2,500 lots of Soybeans and sold 12,500 lots of Wheat and 5,000 lots of Corn.
This is fair to say this was a bullish week: almost a grand slam in the US with Soybeans up +2.36%, SoyMeal +3.91%, Corn +3.00%, Wheat +8.79% in Chicago, +11.30% in Kansas, +0.96% in Minneapolis… Therefore, Minneapolis premium collapsed and ended the week at 84.50 cents to Kansas and 114.50 cents to Chicag. Only SoyOil was down -0.93%. Elsewhere, ICE Canola was up +0.32% in US dollar (USDCAD was up +1.98%), MATIF Rapeseed was down -0.09% in US dollar (EURUSD was up +0.20%) while MATIF Wheat was up +0.35% in US dollar and London Feed +0.39% in US dollar (GBPUSD was down -1.17%). Weather market all week long: drought in the US with condition downgrading, the Beast from the East in western Europe, the thin snow layer in Black Sea, the South American unfavourable weather,…
Oil moved down last week, NYMEX Crude down -4.20% and ICE Brent down -3.98%. US Crude Oil Inventories grew by +3.0M barrels last week, more than expected, the building momentum is positive. Interesting to notice in energy markets, the National Grid in the UK issued a gas shortage notice as the Beast from the East was paralyzing the country. NBP Day Ahead prices surged and settled at 230 pence per therms on the 1st of March… It was sub 50 pence on the 1st of February. Prices have severely corrected since then as the grid never an intervention and it is back trading just above 50 pence.
CFTC COT showed funds – as expected and in a generally larger extent – increase their long bet. They bought 40,446 lots of Corn (expected to be 33,000 lots), increasing their long position to 59,120 lots and 48,269 lots of Soybeans (expected to be 22,500 lots), increasing their long position to 147,380 lots. The only short remaining (they may suffer these days) is on Wheat, they bought 6,407 lots (slightly lower than the 9,000 lots expected), reducing their short to 60,632 lots. The aggregated long is now over 145,000 lots! From historically low to significantly long very quickly! From Wednesday to Friday, funds bought 22,500 Wheat, 36,500 Corn and 28,500 Soybeans, so next COT may be well above 200,000 lots long aggregated.
Night session is a bit sideways but down overall: Soybeans (K8) are flat, Corn (K8) is down -0.75 cents, Wheat (K8) is down -2.00 cents in Chicago, -1.00 cent in Kansas and +0.75 cent in Minneapolis. MATIF is up +€0.75 and London Feed +£0.10.
Jordan is seeking 100,000T of feed barley, as usual with tough tender specs. Tunisia bought 67,000T of milling wheat (best offer was $225.68 CNF), 50,000T of feed barley (best offer was $239.14 CNF). Iran bought 120,000T of Kazak wheat last week. EU has cancelled the duty on sorghum, rye and corn imports.
Last week, US Preliminary Quarterly GDP was as expected +2.5%. UK Manufacturing PMI was a tick better to 55.2, ISM Manufacturing PMI was good at 60.8 (58.7 expected), UK Construction PMI at 51.4 (versus 50.5 expected). Theresa May made a speech about the latest EU proposal and her Brexit vision. It starts to sound like Brexit will be hard or won’t happen at all… Italian Parliament will probably be hung after latest result of General Election, there could be a struggle to form a Government but the Eurosceptic are increasing their influence for sure. Today, UK Service PMI was better than expected to 54.5 (53.3 expected) while US ISM non-Manufacturing is expected at 58.9. EURUSD is trading around 1.23 this morning, GBPEUR just above 1.38.