Markets

Daily market wire 1 Feb 2017

Lachstock Consulting, February 1, 2017

lackstock1

Overview of futures markets

Grains were stronger with oilseeds mixed.

  • CBOT Wheat was up 6.75c to 420.75c
  • Kansas wheat up 3.75c to 429.5c
  • Corn up 2c to 359.75c
  • Soybeans up 1.75c to 1024.5c
  • Winnipeg canola down 2.40$C to 507.5$C
  • Matif canola down -11.75€ to 415€
  • Dow Jones down -107.04 to 19864.09
  • Crude Oil down -0.039c to 52.77c
  • AUD up to 0.758c
  • CAD up to 1.304c, (AUDCAD 0.988)
  • EUR up to 1.080c (AUDEUR 0.7018).

Soybeans

South American weather is still an issue for soybeans, with wet weather forecast for Argentina in the next five to seven days. There is nothing fresh on the demand side with China still on holidays. The recent sell off could encourage renewed buying interest when China returns later this week.

Canola

Canola closed lower with a firmer CAD and technical selling.

Corn

Corn traded slightly higher with a very narrow range on technical support. In spite of strong near-term demand, corn is plagued by the large balance sheet, potential demand reductions and now a spec long position.

Wheat

Wheat closed higher with volatility up 1% in the March contract.

Strength in the Ruble is holding up Russian grain prices and making US SRW cheap from an export perspective. Add to this the fact that there is still a spec short position in wheat and a lot of new crop production volatility to get through and it’s easy to justify it catching a bid. On the weather front Russia and the Ukraine experienced extremely cold temperatures but snow cover was expected to be sufficient to prevent significant winterkill damage.

From a demand perspective Algeria and Iraq are both tendering for wheat and the market will be led by the success/competitiveness of US Wheat.

Australia:

The Bureau of Meteorology has suggested that EL Nino or neutral conditions are likely for our next growing season. Add to this the recent hot conditions in sorghum growing regions, which should limit production potential, and we are getting close to a negative new crop production story.

The AUD continues to suppress local prices and demand remains hand to mouth in wheat and barley.

Source: Lachstock Consulting

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