Friday, Soybeans closed down -1.50 cent, Corn up +1.25 cent and the main movement was on Wheat: +4.50 cents in Chicago, +8.25 cents in Kansas and +9.75 cents in Minneapolis. The Minneapolis premium ended to 142.50 cents to Chicago and 123.50 cents to Kansas. Funds bought 8,000 Corn and 6,000 Wheat and sold 6,000 Soybeans.
Market is still very nervous about the weather as wheat is now entering a critical phase in the northern hemisphere: water is needed. The rain has started in the US wheat areas and there is no more ‘Exceptional Drought’ in the US Drought Monitor (from 0.20%), ‘Extreme Drought’ areas decreased by -0.75% to 6.42% and ‘Sever Drought’ areas decreased by -0.39% to 13.30%. But this is still 47.90% of the US territory classified as dry, so rain is needed and the big question is: is the damage already done?
Overall a week down across the board with currencies playing up. ICE Canola moved up in US dollar by +1.10% but USDCAD moved down -1.56% (so In Canadian dollar, it was down -0.48%). MATIF Rapeseed moved down -0.41% in US dollar (EURUSD moved up +0.52%), Soybeans -2.02%, SoyMeal +1.34%, SoyOil -1.75%, Corn -1.44%, MATIF Corn -085% in US dollar, Wheat -1.60% in Chicago, -4.05% in Kansas, -1.47% in Minneapolis, -0.55% on MATIF (in US dollar) and -0.44% in US dollar in London (GBPEUR moved up +0.86%). Weather concerned were easing a little bit and there was some profit taking.
On a week ending on Tuesday, funds sold 20,253 lots of wheat, increasing their short position to 56,107 lots. They also sold 19,832 Corn and 12,678 Soybeans, decreasing their long position to respectively 213,231 lots and 195,522 lots. From Wednesday to Friday, funds have bought 7,000 lots of Wheat, 13,000 lots of Corn and sold 5,500 lots of Soybeans.
Strong start of the week for Soybeans, +6.75 cents, but weak Monday on everything else: -0.75 cent on Corn, -7.50 cents on Wheat in Chicago, -10 cents in Kansas and -6.00 cents in Minneapolis. MATIF Wheat is ticking down while London feed is up +£0.10 on old crop and -£0.30 on new crop. But London market is becoming quite irrelevant as is now, for the old crop, close to import parity.
EU raised wheat production to 141MT, +1MT from previous estimates as Also, old crop exports are cut – again – by -1MT to 23MT, who’s to blame? Russia obviously! In comparison, pegging new crop exports to 25.3MT can therefore sound optimistic…
Saudi Arabia bought 1.02MT of feed barley just below $250 CNF on average. Iraq bought 100,000T of wheat from US and Australia. On Friday, Algeria bought between 150,000T and 175,000T of durum around $295 CNF, although as usual they do not disclose official results. Tunisia bought 50,000T of soft wheat, 50,000T of durum and 25,000T of feed barley also last week.
US dollar weakness is the topic of the day as EURUSD is rebounding +0.66%, trading above 1.2425 and GBPUSD trading around 1.42, up +0.45%. Trade war talks and fears is not helping the US dollar and investors are getting worried.