So this was a bit of a reversal of the retracement of the post report rally: quite difficult to understand put like this but in other words, roller coaster. Does this invalidate the retracement and validate the rally? Well, it is tough to answer without having a look at the today’s session… Anyway, yesterday, Soybeans ended up +2.50 cents, Corn +1.25 cent and Wheat +11.25 cents in Chicago, +17.25 cents in Kansas and +9.50 in Minneapolis. Wheat movement was more driven by quality and weather concerns than anything else. At the moment, anything is possible and it will depend on the US rains and how much, if they can, Russia can absorb. European market followed the US rally with MATIF Wheat ending up +€2.25 and London Feed +£1.25. In Chicago, funds bought 11,000 Corn, 3,000 Soybeans and 8,500 Wheat. Being the cut off for the CFTC COT, market will expect to see funds buyer of 53,000 Corn, 16,000 Soybeans and 9,500 Wheat over the week.
Wow! What a session so far today! China is retaliating again and so far, soybeans were excluded of the 128 new tariffs. This is not the case anymore… Soybeans, beef, chemicals, planes, cars are added to the list. The Lean Hog CME contract had lost -5.20% on Monday and -4.79% yesterday as the new tariffs included pork… Interesting to see what will happen to Soybeans. Because Soybeans are taking a nice slap, almost -4.00% down with -40.25 cents. Corn is following with -9.25 cents as well as Wheat (-4.25 cents in Chicago, -2.25 cents in Kansas and -9.25 cents in Minneapolis). European markets are also feeling the pain with -€0.75 on MATIF and -£0.60 on the London Feed. China imports 110.8MT of Soybeans, so let’s assume they would not import US beans anymore, it would mean they’d need to import 54% of the world production excluding US (and China obviously). So at some point they will need to pay for US soybeans anyway. But big winner would be without any doubt South America and local Chinese farmers.
Well apart from that really, what to say? Bad timing for Algeria’s OAIC as they booked yesterday at least 330,000T of wheat at $229 CNF, at this price, this will surely be French origin. Japan booked 24,860T of feed wheat on the SBS tender, Jordan is seeking 100,000T of barley and 100,000T of wheat.
US Crude Oil Inventories are expected up +1.4M barrels as NYMEX Crude is trading down -2% with the general bearish mood, trading around $62.25, ICE Brent being at a $4.60 premium.
UK Construction PMI was lower than expected at 47. Eurozone Flash CPI as expected to +1.4%, Core CPI a tick lower than expected to +1.0%. ADP NFP was better than expected to 241K (208K expected), ISM Non-Manufacturing PMI is expected at 59. EURUSD is up reproaching 1.23, GBPUSD is trading up also around 1.4065 while GBPEUR Cross Rate is trading below 1.1450.