Overview of futures markets
US grains and oilseeds futures markets all were lower on Friday.
- CBOT Wheat was down -3.25c to 422.75c,
- Kansas wheat down -8c to 445.25c,
- corn down -1.75c to 358c,
- soybeans down -4c to 996.25c,
- Winnipeg canola down -3.60$C to 525.9$C,
- Matif canola down -2.75€ to 412.25€.
- AUD up to 0.7450c,
- CAD up to 1.345c, (AUDCAD 1.018)
- EUR up to 1.069c (AUDEUR 0.707).
The US Dollar lost ground on the other agri‑exporter currencies on Friday. The greenback’s recent rally seems to have run out of steam for now. The Australian dollar, following the broader market pattern, rose about a half‑cent.
Corn futures had five consecutive lower trading days last week. Anticipate technical weakness early this week. The USDA report had raised its South American crop estimates last week and put its global carryout estimate up by 3 million tonnes (Mt). US stock estimate was unchanged on previous month. The Commbank report suggested the long term outlook for grain markets though is one of gradual improvement, so corn will eventually find buyers; buyers have a history of stepping back in around the 350‑60¢ level.
Soybeans and canola
Soybean futures were again lower on Friday, and canola followed. The Commbank report said the USDA’s 4mmt upgrade to the Brazilian crop (now 108mmt) caused a stir last week, And the market clearly had very different ideas about how US inventories were going to shape up. The prospect of season 2016 inventories rising when record acreage is on the cards for season 2017 is not a price‑friendly combo. Friday’s commitment of traders (COT) position report showed that investors had, in the week to last Tuesday, reduced their long positions a little further – no big surprises there. But, like corn, it expected buyers to eventually step back in. The 10$ mark has a tendency of attracting support.
Lower wheat futures emanated from reduced immediate concern about northern hemisphere winter wheat crop growing conditions. Crops in both Black Sea region and in the US appeared to have come out of winter dormancy with little winterkill damage. Production uncertainties turned to available moisture conditions in the vegetative phase. The US hard red winter (HRW) wheat crop remained at risk of reduced yields.
Useful rain is on the forecast again this week. It is likely the winter crop planting outlook will improve on the east coast. The northern cash markets continue to be strong, e.g. Brisbane sorghum ended last week nudging $A270/t. Those loading ships on a busy shipping stem are bidding strongly. This strength is maintaining strong prices at inland sites for domestic and export sales. The Australian dollar this morning was half a cent higher than Friday.
Today’s market report includes material from Commonwealth Bank Agri-commodities daily alert