After a hesitant start of the day, market closed collectively higher: Soybeans up +6.50 cents on drought in Argentina, Wheat up +9.25 cents in Chicago, +11.75 cents in Kansas and +4.00 cents in Minneapolis on US drought while Corn was relatively quiet (+2.00 cents) in comparison. On the other side of the Pond, mimetic behaviour as MATIF Wheat moved up +€1.00 and London Feed +£1.25. Broadly speaking, market is waiting for rain, as simple as this. In Chicago, funds bought 6,500 Corn, 6,000 Soybeans and 5,000 Wheat. The COT might get longer than expected at this rate…

 

Night session is softer, a bit of a breather (mostly on Wheat to be fair): Soybeans -0.50 cent, Corn -0.25 cent, Wheat -5.25 cents in Chicago, -6.25 cents in Kansas and -4.50 cents in Minneapolis. MATIF is down -€0.50 and London Feed +£0.60.

 

US Exports Inspections were 400.9kT on wheat. Situation is the same: seasonally late (70% versus 73% on average) but still better than last year (68%). Hopes are permitted, especially considering there’s a (tiny) buffer of uninspected exports. Corn fell drastically compared to last week, to 647.6kT… Is there another solution but cutting the exports on the next WASDE? With 36% of the target completed (47% last year, 44% on average), there is a huge delay and it will be difficult to make it up. Soybeans are in a similar situation, with 990.1kT this week, 68% of the target is completed, versus 75% last year and on average.

 

So next WASDE could bring some relief on the US balance sheet, couldn’t it? Well, actually, market participants sees the US ending stocks to be cut by -1.02MT on corn, flat on soybeans and up +0.11MT on wheat… However, world ending stocks are all seen cut: -3.93MT on corn, -2.83MT on soybeans and -0.47MT on wheat. It will be a very interesting one! Eyes will be directed towards Argentine and Brazil: on corn, the first is expected at -2.48MT (to 36.58MT) and the second at -2.78MT (to 92.22MT); on soybeans, the first is expected at -7.64MT (to 48.36MT) and the second at +1.82MT (to 113.82MT). It was expected and feared that Brazil soybeans would not be close to compensate the cut in Argentina.

 

Taiwan Flour Mills are seeking for 92,465T of US wheat, South Korea Kocopia is seeking for 165,000T of corn, Turkey is seeking 149,000T of corn… While Jordan made no purchase of wheat but is still on for barley… In theory! Also, GASC is back seeking wheat, once again, tough to see Russia taking most of the tender.

 

In the UK, it’s said Vivergo is back in the game. This should drive the demand higher, not sure of any detail yet as there is no public announcement available yet.

 

UK Service PMI was better than expected to 54.5, US ISM Non-Manufacturing was also better to 59.5. EURUSD is trading just below 1.2340, GBPUSD below 1.3847 and GBPEUR cross rate just below 1.1225.

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