A messy Friday, market is a mess… Soybeans up +9.25 cents, Con up a couple of ticks, Wheat down -6.00 cents in Chicago, -1.50 cents in Kansas but +4.75 cents in Minneapolis. On the other side of the Pond, MATIF took a couple of ticks breather and London Feed was down -£1.25. In Chicago, funds bought 6,500 Corn, 4,000 Soybeans and sold 6,000 Wheat.
The bull has awaken last week, in a dramatic fashion. Indeed, MATIF Wheat touched €200! It ended the week just below that level but up +3.36% in euro (+2.82% in US dollar as EURUSD was down -0.53%). London Feed followed, up +4.44% in British Pounds (+4.21% in US dollar as GBPUSD was down -0.22%). Dry conditions across Europe, Scandinavia and Black Sea fuelled the panic: yield of wheat and barley are going to suffer and the last time there was a widespread dryness patter was in 2007/2010/2012 show there is still some margin on the upside! Chicago Wheat closed the week higher +2.81%, +4.72% in Kansas and +2.82% in Minneapolis. Corn was also strong, +1.90% in Chicago and +4.08% in Paris in euro (+3.53% in US dollar). No exception on the Soy complex with Soybeans up +2.34%, SoyMeal up +1.90% and SoyOil +1.34%. ICE Canola was up +0.67% only in Canadian dollar (+1.41% in US dollar as USDCAD was down -0.73%) and MATIF Rapeseed was up +1.57% in euro (+1.03% in US dollar).
Market did not feel Monday was to consolidate and started on a very strong note. London Feed up +£2.70, MATIF up +€2.50, trading above €200 again, Chicago Wheat up +8.00 cents, +10.00 cents in Kansas, +9.00 cents in Minneapolis. Corn is up +3.00 cents and Soybeans +4.75 cents. It is all about the (dry) weather. If next USDA WASDE get an even worse picture, with the Southern Hemisphere not coming to the rescue, it could become tighter and tighter on wheat… Not even talking about quality!
CFTC COT showed Wheat speculators are back to long! They bought more than the 4,500 lots expected: 20,385 lots! They are now long 23,942 lots. And, on a week ending Tuesday, a surprise on Corn and Soybeans: funds were expected buyers by respectively 31,000 lots and 13,500 lots. They actually sold respectively 874 lots and 2,916 lots, increasing their short position to 13,197 lots and 61,315 lots. From Wednesday to Friday, funds are expected on the buy side for 2,500 lots of Wheat, 31,500 lots of Corn and 2,500 lots of Soybeans.
No major stats today, BoJ expected later today, no change of policy expected (-0.10%). Chinese PMI also, Manufacturing expected to 51.4, Non-Manufacturing to 55.0. EURUSD is trading above 1.1675, GBPUSD around 1.3115.