Market moved down -14.25 cents on Corn yesterday, surprised by the extent of the US yield increase. Wheat moved down -12.00 cents in Chicago, -16.00 cents in Kansas and -10.25 cents in Minneapolis. On the other side of the Pond, London Feed was down -£1.35 and MATIF -€1.75. The lack of export control (yet) and the fact that finally the Russian crop is expected above 70MT by USDA has been weighting on the market. But with an extraordinary pace of exports in August and September, Russia could come back in the headline! Soybeans were the only in the green with +8.25 cents. In Argentina, the soybeans plantings are expected to be down -10% on the new export tax.
In Chicago, funds sold 47,000 Corn and 11,000 Wheat while they bought 9,000 lots of Soybeans.
So let’s have a closer look at the USDA WASDE!
Wheat Old Crop: an adjustment of the Russian consumption by -1MT and ending stocks are raising by +1.29MT.
Wheat New Crop: obviously beginning stocks were helped by the old crop. But on top of this, the world production was raised by +3.37MT to 733.00MT! If there were production cuts from Australia (-2.00MT to 20MT) and Canada (-1.00MT to 31.50MT), it was more than compensated by India (+2.70MT to 99.7MT), Russia (+3.00MT to 71.00MT) and Kazakhstan (+0.50MT to 15MT). On the consumption, main change is coming from Russia: +2.50MT to 40.50MT. To be noted, Russian exports remain at 35.00MT, US balance sheet was untouched. Ending stocks are raised by +2.33MT to 261.29MT, 36.18% of the production, 37.03% of the use. With a world production down -25.27MT year on year, this is not too bad…
Corn Old Crop: a production adjustment of +0.34MT and a decrease of consumption of -0.48MT and the ending stocks are raised by +0.82MT.
Corn New Crop: same as wheat, helped by old crop and improved by new crop. The big surprise is the US production, +6.11MT to 376.62MT! Yields are increased to 181.3 bushels per acre! Market was caught off guard! US consumption is raised by +1.90MT to 322.72MT and exports are raised by +1.27MT to 60.96MT. World production is raised by +7.95MT to 1,069MT. EU is the other major change of the balance sheet: production is raised by +1.00MT to 60.8MT and consumption is raised by +3.5MT to 82.5MT. World ending socks are therefore raised by +1.54MT to 157.03MT, 18.78% of the production, 18.19% of the use.
Soybeans Old Crop: Chinese consumption is decreased by -1.00MT and ending stocks are down -0.87MT.
Soybeans New Crop: despite the small handicap, ending stocks are raised by +2.32MT to 108.26MT. World production is raised by +2.22MT to 369.32MT thanks to US production up by +2.92MT. Indeed, another yield bump! US yield is raised to 52.8 bushels per acre. On the consumption side, China is the main hit, -1.50MT (on crush), partially offset by US, up +0.32M (mainly on crush). Soybeans stocks are 28.13% of the production and 28.11% of the consumption.
GASC booked 235,000T of… Russian wheat! Between £240.15 and $240.38 CNF. How long will it last? At some point, an official action on the exports will be needed, else, there will be some issue of food security. Jordan has cancelled its tender of wheat as the two offers received were said to be too high. Tunisia is seeking 50,000T of durum, 67,000T of soft wheat and 75,000T of feed barley. Algeria had bought 630,000T of wheat at least, between $262 and $263 but always difficult to know! They think they gain for the lack of transparency of the result, this is very arguable. Main origin will be French as usual. Saudi is seeking 595,000T of hard wheat.
Quiet night session: Soybeans are still up +3.25 cents, Corn is a cent up or so, Wheat is down -3.00 cents in Chicago. In Europe, MATIF Wheat is trading down
US export sales were 387.6kT of wheat, 774,2kT of corn and 693.4kT of soybeans.
BoE left the rates at 0.75%, unanimous decision. US CP and Core CPI were both a tick worse than expected to +0.2% and +0.1%. US Unemployment Claims were better than expected to 204k. EURUSD is rebounding and trading close to 1.17, GBPUSD is following, trading around 1.3115.