Market was a bit in hungover mode after the USDA WASDE. The problem of partying like there’s no tomorrow is that… Well… There’s a tomorrow! This was a correction across the board as market was wondering if the bullish wave wasn’t too much as it was widely anticipated. Only Corn managed to keep its composure with only -1.25 cent. But Soybeans were down -17.75 cents, Wheat -17.25 cents in Chicago, -13.00 cents in Kansas and -7.25 cents in Minneapolis. In Europe, MATIF Wheat moved down -€2.75 and London Feed -£1.20. In Chicago, funds sold 10,000 Corn, 18,000 Soybeans and 7,000 Wheat.
Night session is still red across the board. Soybeans are down -3.25 cents, Corn -5.50 cents, Wheat -9.50 cents in Chicago, -9.00 cents in Kansas and -5.25 cents in Minneapolis. Lower euro is not helping MATIF and it is also down -€1.50 and London Wheat is also following the move, down by -£1.25.
Iraq has bought 100,000T of Australian wheat at $313.75 CNF. Iran is seeking 60,000T of sugar.
France is in a good position as Stratégie Grains is pegging the crop at 37.788MT. Russian lower exports next season will reopen lost market shares. However, soft wheat EU production is cut by -0.9MT to 139.9MT as crops are suffering from dryness. This is even truer in Sweden and Denmark for spring crops as exportable surplus of spring malting barley will be significantly lower.
US Crude Oil Inventories were down more than expected yesterday, showing a withdrawal of -4.1M barrels. No major change on Crude Oil though as NYMEX Crude is trading above $66.75 and ICE Brent almost at a $10 premium.
ECB holds the rate unchanged at 0%, no surprise there. However, EURUSD got hammered on the news that, finally, the bond purchasing program will end by the end of December. We’ll see… Anyway, EURUSD is losing ground, trading down back to around 1.1725 but to be fair this is only 60 pips, we’ve seen worse. Yesterday, US PPI and Core PPI were both better than expected to respectively +0.5% and +0.3%, FED left the rates unchanged: market still sees 4 rate hikes in 2018, we had only one so far, need to hurry… And 3 for 2019… UK Retail Sales were surprisingly good with +1.3%. GBPUSD is resisting. Trading flattish around 1.3375, hence, GBPEUR Cross-Rate is up, back above 1.14.