Another rough day, and markets closed lower, the extent of the recent dip was such that it is now significantly lower the than before the USDA WASDE. Funds liquidation: they had a good run, time to take a breather and realize some profits and watch the World Cup with fewer positions. Weather: it’s not really improving drastically, but at least it is not worsening, truer in the US than in Black Sea, even Neymar Jr was sweating like crazy in Rostov… Russian prices are still going higher. Geopolitics: trade wars threats galore involving the US! Soybeans moved down -21.75 cents, Corn -1.75 cent, Wheat -2.00 cents in Chicago, -2.50 cents in Kansas and -6.75 cents in Minneapolis. On the other side of the Pond, similar market sentiment as MATIF Milling Wheat moved down -€2.75 and London Feed was down -£1.60. In Chicago, funds sold 6,000 Corn, 16,000 Soybeans and 3,500 Wheat.
Eventful week then! A bloodbath in the end! Soybeans printed -6.58%, SoyMeal -5.28% and SoyOil -3.34%. Corn moved down -4.37% in Chicago and -2.82% in US dollar on MATIF (EURUSD was down -1.35% week on week). On Wheat, markets moved down -3.94% in Chicago, -3.44% in Kansas and -3.67% in Minneapolis (premium ended the week at 51 cents to Kansas an 71.25 cents to Minneapolis). In Europe, MATIF was down -3.61% in US dollar and -2.70% in US dollar for London Feed (GBPUSD was up +0.41%). Also to be noted ICE Canola was down -1.61% in US dollar (USDCAD was up +2.13%), MATIF Rapeseed -2.54% in US dollar, NYMEX Crude oil -1.03% and ICE Brent -3.95%. A bloodbath indeed.
On a week ending Tuesday, the CFTC COT obviously showed funds were selling, and the next one is expected to be even worse considering that more selling took place from Wednesday to Friday. Funds sold 1,383 lots of Wheat, 77,383 lots of Corn and 59,429 lots of Soybeans, decreasing the long position to respectively 14,903 lots, 36,216 lots and 12,870 lots. From Wednesday to Friday, funds sold an estimated 16,500 lots of Wheat, 46,000 lots of Corn and 41,000 lots of Soybeans, in other words, we could be back to a treble short, drastic change in a few weeks and so far, as far as specs positions are concerned, what a season!
Night session is red again… Soybeans only by -0.75 cent, Corn by -3.00 cents and Wheat by -6.50 cents in Chicago, -7.00 cents in Kansas and Minneapolis manages to keep the head out of the water. Meanwhile, MATIF Milling Wheat is down -€1.25 and London Feed -£0.25.
Ethiopia bought 200,000T of Wheat in their last tender. It is always a tricky execution as it has to be delivered in inland silos through the port of Djibouti. Although, it’s rumoured that the deal was done CNF LO at a price of $260.05. South Korea is struggling with Canadian wheat flour shipments as Canada has detected unauthorised GMO’s, they are halting sales to investigate where does the procured wheat came from. Maybe Canada! In 2017, South Korea purchased 226,355T of Canadian wheat, 9.2% of their total imports.
No major macro news or data today apart from the trade wars topic. Preliminary UoM Consumer Sentiment was better than expected on Friday to 99.3. Tomorrow US Building Permits are expected at 1.35M. EURUSD is down a handful of pips, trading around 1.16, GBPUSD is down a tad more, trading around 1.3250.