Let’s cut it short, those days are just about the USDA WASDE, the day of the month the fundamentals matter… Or not!

Wheat Old Crop: nothing major but every little helps. Production in Argentina is raised by +0.5MT to 18.5MT, hence world ending stock are raised by +0.49MT.

Wheat New Crop: obviously starting with some help from the old crop but it was insufficient and balance sheet tightened, against expectations. Indeed, world ending stocks are cut by -1.11MT to 260MT, this is still 34.90% of the use and 35.60% of the production, so nothing to worry about just yet. However, more than half of the stock (52.32%) is held in China so world excluding China is a drastic different picture, stocks are 20.58% of the production and 19.89% of the use. Still no panic but worth keeping an eye on. Year on year, stocks are down -14.67MT, excluding China, that’s -23.97MT. Australian production was cut by -1.50MT to 18.5MT, Russian production was cut by -1MT (USDA is really struggling in its estimates!) to 70MT. Use is cut by -0.46MT globally, -0.27MT in the US and -0.20MT in Russia. That’s pretty much it. To be noted, US wheat exports remained unchanged and are still pegged at 27.9MT.

Corn Old Crop: Wow! US feed use is taking a hit, -3.77MT! US exports are readjusted by +0.34MT to 61.94MT. Mexican production is raised by +0.65MT to 27.45MT. Therefore, world ending stocks are raised by +4.06MT.

Corn New Crop: It needed the old crop help to be fair as, as far as the new crop is concerned, it has disappointed the market. World ending stocks are raised by only +2.32MT to 159.35MT, considering beginning stocks up by +4.06MT, this is not massively exciting. Expectations for US, has hinted yesterday were slightly over the top anyway, so market cannot feel genuinely surprise and ignoring the old crop to make the market rebound is very convenient! US exports are raised, not surprising considering the inspections, by +1.91MT to 62.87MT. Feed use is decreased by -0.63MT but the real symbolic upset for the market was on the production side, -0.63MT to 375.37MT. Maybe USDA was a bit in a jolly and was overoptimistic last month when setting up the yield at 181.3 bushels per acre! It is cut to 180.7 bushels per acre. No major change other wise, a few bits and bobs on production (Egypt +0.4MT, EU +0.2MT, Canada +0.2MT, FSU -1MT) and use (Mexico +0.5MT). World ending stocks are down -38.86MT year on year to 159.35MT, it is by far the tightest balance sheet as it represents 14.30% of the use and 14.92% of the production.

Soybeans Old Crop: US (+0.52MT to 120.04MT), Brazil (+0.30MT to 119.8MT) and Paraguay (-0.19MT to 9.81MT) production adjustments as well as cut in use (-0.65MT in the US) took the ending stocks higher by +1.91MT.

Soybean New Crop: Same scenario than corn in a lower extent, world ending stock are up but less than the beginning stocks. They are up by +1.78MT to 110.04MT, 31.17% of the use, 29.78% of the production, +13.39MT year on year,… Picture is not bad by any means. So very little change, US production is cut by -0.10MT to 127.63MT… Despite a yield increase! USDA bumped up the yield b +0.3 bushels per acre to 53.1 bushels per acre, but harvested areas are cut by -0.6M acres to 88.3M acres. No major change, to be noted, US exports remained pegged at 56.06MT.

Market reaction? Soybeans and Corn ended up respectively +6.00 cents and +6.50 cents, and Wheat down by -2.50 cents in Chicago. In other words, kind of the opposite of the logic as balance sheets are heavier for corn and soybeans and tighter for wheat! But the psychological effect of cutting the US corn and soybeans crops has triggered a bit of short covering. Market is always right, even if it might be wrong! There’s no real change in the global picture but funds might take the signal that we reached the fundamental bottom line and now, any potentiality for getting balance sheets heavier are quite limited. Kansas and Minneapolis followed Chicago and closed down by respectively -2.50 cents and -2.25 cents. On the other side of the Pond, only 30 minutes to enjoy the report and market closed slightly more logically up in MATIF Wheat by +€0.75 and +£0.40 on London Feed.


However, everything is up on the night session, sounds like indeed we could enter in the wintery phase of “we know everything and we have to wait until plantings and crop enter dormancy” so short bets could be taken off the table in a wait and see mood. Soybeans are up +7.25 cents, Corn +1.00 cent, Wheat +4.00 cents in Chicago, +4.50 cents in both Kansas and Minneapolis. London Feed has opened up +£0.25, MATIF is ticking sideways at the open.


Bangladesh is issuing a new tender to buy 50,000T of wheat. On the latest, they received a best offer of $297.20 CNF FO. China sold 656,845T of corn of its ageing reserve at $209.10, a quite successful auction as 16.42% of the volume offered was awarded.


France AgriMer said French corn is 65% harvested, a strong pace, +23% from last year. Also, 15% of the winter wheat is planted, +10% from last week.


US CPI and Core CPI were both a miss by a tick, to both +0.1%. Unemployment Claims were also higher than expected to 214k, +7k more than expected. EURUSD is trading around 1.1580, GBPUSD around 1.3215, both down this morning.


US Crude Oil Inventories showed a much higher build up than expected (+6.0M barrels versus +2.3M barrels expected). Logistic on the eastern coast and gulf is not easy by any means these days with the hurricane seasons. Crude Oil is trading $71.65 on the NYMEX with ICE Brent at a $9.3 premium.

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