Overnight markets
Higher for grains and oilseeds.
CBOT wheat was up 18c to 495c,- Kansas wheat up 17.5c to 522.25c,
- Corn up 2.75c to 382c,
- Soybeans up 6c to 1055.5c,
- Winnipeg Canola up 2$C to 524$C, and
- Matif canola up 1€ to 360.5€.
- The Dow Jones down -10.38 to 25399.64,
- Crude Oil down -1.31c to $US61.7 per barrel, AUD down to 0.778c,
- CAD up to 1.283c, (AUDCAD 0.998) and the
- EUR down to 1.220c (AUDEUR 0.637). .
Wheat
Wheat markets exploded today, as Soft Red Winter (SRW) wheat futures pushed through the 200-day moving average, encouraging funds to hit the exit button all at the same time. SRW pushed through highs not seen since late August last year.
Wheat prices in Russia rose US$2/t to $207/t FOB (free on board). This is on the back of increased winterkill threats in new crop, as well as execution challenges associated with available grain access and logistics at port.
Funds have clearly changed their tune on bearish wheat bets, given the low global appetite for short volume positions. This is not expected to change until some production certainty is evident in South America and the northern hemisphere.
Corn
The recent strength in corn has prompted a huge wave of US farmer selling, which has seen a large shift in structure with the funds now the holders of most of the long position. There are too many unknowns in the corn market at present to justify selling it US25c/bu off seasonal lows.
We have a large production variance in Argentina with downside bias, strong US disappearance, production concerns for Brazil’s second crop, as well as an acreage battle with soybeans coming up.
Corn has not rallied in check with wheat, a situation which could correct in the near future.
Weekly ethanol production was 2.2% for the week to 1.044 million barrels per day.
Export sales tomorrow are expected to come in between 1-1.4 million tonnes (Mt).
Soybeans
Soybeans finished with moderate gains, forging new highs not seen since January last year for the second consecutive session.
Argy weather continues to be the major catalyst, as conditions deteriorate further, meal futures find an aggressive bid, which in turn supports beans. Meal was up US$5.50/t, while soy oil was down 17 points.
Canola
Canola continued on its upward trajectory towards Can$530/t in the May contract. Futures closed off their highs again, failing to close through yesterday’s highs, although the trend remained upwards. The Canadian dollar helped, falling almost 0.5pc, which helped to offset a flat vegoil market.
Australia
Aussie markets were dead yesterday, with the exception of sorghum where the presence of Chinese export demand is combining with a delayed crop and limited farmer selling to hurt nearby shorts.
Barley markets were unchanged despite the lower dollar, due to limited participation from China.
Australian cash wheat markets remained well supported thanks to our attractive value relative to other origins competing internationally. Markets here would appear to have a reasonable long position with few export shorts, and activity recently has been quiet.
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