Note: USDA heatmaps were generated automatically by an Excel file, feel free to download it.

Yesterday was all about waiting for the report. There was a bit of disappointment and it has been pretty shaky but finally, market collectively closed on the red side. The bearishness of Soybeans and the lack of real bullish surprise on wheat and corn dragged everything down. Soybeans finished down -8.50 cents, Corn finished down -8.50 cents, and Wheat -11 cents. Funds sold 16,000 Corn, 8,000 Soybeans and 5,000 Wheat. On the other side of the pond, MATIF and CME EU focused on the local bullishness of wheat and MATIF closed up +€1.25 while the premium of CME EU decreased slightly as it closed only up +€0.50.


Night session is still lower on Soybeans (-3.50 cents) but there’s a partial retracement on Corn and Wheat, respectively higher +1.25 cents and +2.50 cents. Europe is just ticking down.


Big yawn… For those who woke up on purpose, they can go back to bed. Next USDA WASDE on the 9th of November… No massive excitement coming from this USDA WASE report indeed. On a very high level, at the end of the new marketing year, wheat stocks are revised down -0.70MT to 248.37MT, revised down -2.65MT to 216.81MT for corn and revised up +5.19MT to 77.36MT for soybeans. So mostly neutral for wheat and the very moderate potential bullishness for corn is more than offset by soybeans. Ratios are still very comfortable, wheat stocks are at 33.6% of the production and 33.69% of the consumption, for beans this is respectively 23.22% and 23.53% while for corn it is 21.14% and 21.28%. So there is still a huge buffer there and despite local issues and quality issues, there’s no need to worry about the quantity of supply.


On the wheat old crop, there was no major change, EU saw an increase of 1.08MT on the consumption (mostly feed) and world ending stocks are revised down -1.23MT. Still, the old crop saw an increase of stock of 10.91%. On the new crop, obviously the beginning stocks are cut by -1.23MT but the ending stocks are only down -0.70MT (to 248.37MT) so there’s no bullishness by any means. Indeed, world if production is cut by -0.41MT to 744.44MT, use takes a bigger hit and is cut by -0.94MT to 735.73MT. The US balance sheet is heavier, despite an adjustment of the production to 62.86MT (-0.30MT) and higher exports (+0.68MT to 26.54MT), ending stocks are up +1.05MT to 30.98MT thanks to lower feed: -1.90MT. Another noticeable move is obviously in EU, production is cut by -2.05MT to 143.22MT (it’s -10.49% lower than the old crop) but it’s offset by logically lower exports (-1MT to 25MT). There was also a cut of -0.60MT of the consumption and EU ending stocks are finally down -1.51MT to 10.53MT. So the global picture is not really worrying as far as the quantity is concerned, world production is up +9.42MT from one year to another and stocks are up +8.71MT. Interesting also to see that Australia production is now pegged above 28MT to 28.3MT, USDA raised its forecast by +0.8MT, discounting in fact the effect of freeze and floods. No change in Russia and Ukraine, still pegged respectively at 72MT and 27MT.




On the old crop for corn, very little change. Interesting to be noted US exports are down -0.44MT to 48.2MT. This was expectable as the total of export inspections were short -1.89MT of the exports. There is still a bit of difference but it’s much more reasonable. Very few significant other movements and world ending stocks of old crop are revised up +0.80MT to 210.05MT, this is +1.13MT compared to the previous crop. On the new crop, the data under scrutiny was obviously the US yield. And… -1 bushels per acre, down -0.57% this is partially offset by higher harvested areas (+0.23%) so crop is only revised down -0.23% to 382.48MT (-0.9MT), so slightly less than the average scenario the market was thinking about. US exports are up +1.27MT (to 56.52MT), therefore US ending stocks are down -1.61MT to 58.94MT. Also to be noted, Argentinian ending stocks are lowered by -0.9MT, mostly due to a cut of exports to 25MT (-1MT). That’s about it really. From new crop to old crop, stocks are increasing by 6.76MT, the increase of 66.55MT of the production (now pegged at 1,025.69MT) is mostly offset by growth in use (+60.92MT). Interesting to see that the feed growth is +4.31% from old crop to new crop while it’s +9.77% in non-feed. If oil prices are going sharply up over the next few month, this trend could just continue. So very ample supply of corn for sure but strong demand. Nothing to worry about but any issue could create an imbalance very quickly.




Finally on Soybeans, on the old crop there was a cut of Brazilian exports to 54.38MT (-1.12MT), a cut on China crush (-0.50MT to 81.3MT). Also interesting to see US exports were adjusted by -0.11MT to 52.69MT, quite shy considering export inspections were short -1.47MT of the exports but USDA showed good faith here by doing a little. But full consistency on the US crush as USDA match the number with NOPA, cutting the old crop crush by -0.37MT. So world ending stocks on the old crop are up +2.55MT to 75.45MT. This won’t move a lot from now, the worse have been avoided, it was 80.42MT in the March USDA WASDE! But Brazilian crop was pegged at 100MT and Argentinian crop at 58.5MT but rains and flood hit them to currently respectively 96.5MT and 56.8MT. And thanks to very good expectations on the new crop stocks are back on the raise!  On the new crop, ending stocks are raised indeed by +5.19MT to 77.36MT, obviously +2.55MT of those are explained by beginning stocks, so technically, new balance sheet is heavier by +2.64MT. And this is partly thanks to US production: +1.85MT to 116.18MT. This is due to higher yield, +1.58% (+0.8 bushels per acre) to 51.4 bushels per acre. Brazilian crop is also raised, by +1MT to 102MT. Nothing much otherwise. Also to be noted US exports are raised by +1.09MT to 55.11MT. In other words, this is a hat trick increase of US exports on new crop (on wheat, corn and soybeans), ports are going to be crowded, inspectors busy and inspections under heavy scrutiny! Also, Argentinian exports are decreased by -1MT to 9.65MT. Talking about Argentina though, production is still pegged at 57MT while it’s locally seen more like around 53MT. So new balance sheet moves are most probably not over just yet.




Amazing! Jordan has managed to buy 100,000T of wheat at $203 CNF. Japan has purchased a little 16,190T on the SBS feed wheat tender, but on the regular tender, they bought 100,143T of food wheat, from US and Canada. Philippines privates buyers have purchased 155,000T of feed wheat. Saudi Arabia’s SAGO is seeking 595,000T of hard wheat, December and January Shipment. South Korea’s MFG is seeking 140,000T of corn. Algeria tender’s deadline is today. And on top of this, after a big move, not a big surprise: GASC is back!


US Crude Oil inventories are expected to rise by +0.4M barrels today. NYMEX Crude is back just below $50, this level is going to be very stick until we know more about the actual cut plan and if it is going to be enforced and if non-OPEC members are joining the effort… A lot of ‘ifs’ so tough to find a reason just yet to surge to $60. ICE Brent is currently trading above $51.50. On Freight, Baltic Dry Index BADI was lower to 906 (-16): demand on larger vessels was lower but this was partially offset by higher demand on larger vessels.


EURUSD is gradually going down and is now trading below 1.10. The FED’s FOMC minutes showed that it was a close call and it pointed the fact the rate hike will happen “relatively soon”. We’ve heard that already but now, the December hike is really on the market expectations. US unemployment claims today. GBPUSD rebound sharply yesterday, going back above 1.2250 but is correcting again today, back just above 1.2150. It’s fair to say that the next few months are going to be volatile… If Theresa May is going through the parliament, which finally it seems she’s keen on doing this , the chance Article 50 will be triggered in March are very low as there will be a lot of challenge. But maybe that’s the plan! A MP of the opposition said they won’t let the cabinet “go into a locked room and come out with some plan that they want to keep secret”, so some parliamentary battle is to expect.