Another messy day on Friday as Soybeans closed down -2.75 cents, Corn up +5.25 cents and Wheat up +18.00 cents in Chicago, +17.50 cents in Kansas and flat in Minneapolis. MATIF was up +€4.50 and London Feed +£2.70. US wheat could be in demand and be back to competitiveness on the international scene as weather is hot and dry on the Old Continent, yields prospects on wheat are decreasing, as well as on barley. There will also be quality issues obviously. In Europe, malting barley export surplus available from Denmark and Sweden is vanishing at a high pace. In Chicago, funds bought 20,000 Corn, 15,000 Wheat and sold 2,500 Soybeans.
It conclude and eventful week (and month to be fair). Last week, Soybeans fell by -4.02%, SoyMeal by -1.86%, SoyOil by -0.31%. Corn was down -1.96% in Chicago and up +0.39% on MATIF in US dollar as EURUSD was up +0.24%. On Wheat, markets were all over the place with Chicago up +1.27% but Kansas down -3.68% and Minneapolis -5.01%. The Minneapolis premium to Kansas is back to 50.75 cents over Kansas and 24.00 cents over Chicago. It took a bit of a long time to come back down from $2 but that was probably the obvious trade of the last 18 months. MATIF Wheat was up +1.07% in US dollar, and London Feed +2.04% in US dollar (GBPUSD was down -0.46%). ICE Canola moved down -0.17% (USDCAD was down -1.05%) and MATIF Rapeseed +1.80% in US dollar. Also to notice, NYMEX Crude Oil moved up +8.12% (closing at 74.15) and ICE Brent up +5.12%, trading at a premium of $5.3.
Over the week ending on Tuesday, CFTC COT showed that funds again sold more than expected, extending their short position. Funds sold 11,725 Wheat (5,500 expected) increasing the short to 12,477 lots, they sold 46,281 Corn (expected 11,000) increasing their short to 60,319 lots and 31,184 Soybeans (expected 25,000) increasing their short to 43,985 lots. Basically back beyond the 100,000 lots aggregated short, there is some kind of position swings this season! From Wednesday to Friday, funds are extended to have been buyer of 6,000 lots of Wheat, 2,500 lots of Corn and seller of 7,500 lots of Soybeans.
To be fair on Friday, there was also a USDA report. Plantings report. This is to compare to the previously published intentions. Corn plantings reached 89.1M acres (88M of intentions, 90.2M final in 2017), 89.6M acres of soybeans (88.98M intentions, 90.1M final in 2017) and all wheat 47.8M acres (47.3M intentions, 46M final in 2017). Fairly neutral, no surprise. The quarterly stock report contributed to the market movement at least on Wheat. No real surprise on corn stocks, 134.78MT, +1.96M above last year. Soybeans stocks were 33.26MT, +6.97MT from last year. But on wheat, even though it was expected, stock surprised by being -2.20MT lower than last year to 29.94MT.
Monday session started on very strong basis! MATIF Wheat +€4.25, London Feed +£4.75. It is hot and dry and people starting to panic, especially after Stratégies Grains said crop tour in France is suggesting a cut of expectations by -4MT (to 33.2MT): from a bumper crop to a not so good crop? If it is not materialising, it will raise again credibility on crop tours. They are blaming the earlier rains in the season. Next USDA WASDE could be an interesting one! In The UK, raise of prices without significant Ethanol prices increase could raise the question of the profitability of Ethanol plants and some might be again in a situation where it’s cheaper to stop than to produce. Night session in the US is quieter: Soybeans are ticking up, Corn down -0.75 cent and wheat up +5.75 cents.
Iraq purchased 50,000T of wheat at $295 CNF, from Canada. Raising prices made Algeria panic and they are back seeking milling wheat.
US dollar is stronger to start the week: WURUSD is trading down around 1.1635, GBPUSD sown around 1.3125. EU Final Manufacturing Index as expected to 54.9, UK Manufacturing PMI as expected to 54.4, ISM Manufacturing expected later at 58.2