Markets

Daily market wire 1 November 2017

Lachstock Consulting, November 1, 2017

Overnight markets:

Lower for grains and higher for oilseeds.

  • CBOT wheat was down -6.25c to 418.5c,
  • Kansas wheat down -5.25c to 416.5c,
  • corn down -3c to 345.75c,
  • Soybean up 0.25c to 984.75c,
  • Winnipeg Canola up 1.80$C to 518.7$C,
  • Matif canola up 2.5€ to 372€.
  • The Dow Jones up 27.60 to 23376.35,
  • Crude Oil up 0.27c to 54.42c,
  • AUD down to 0.765c,
  • CAD up to 1.289c, (AUDCAD 0.987)
  • EUR up to 1.165c (AUDEUR 0.657).

Wheat

Wheat is officially in the doldrums after breaking through significant support last night to finish at the lowest levels since late August. Funds took a large swing at wheat today on month end, with open interest increasing 9000 contracts, forcing a new lower low and a lower close. Implied volatility in December Soft Red Winter wheat futures went out at 18.5 per cent. Fundamental news featured a flash USDA sale of 100,000t to Iraq, although that was factored in when the tender results were announced. The improvements in planting progress announced yesterday have taken risk out of new contracts given that we are not too far behind the average planted levels for this time of year. What isn’t being considered is the conditions report which show 52pc good to excellent and 12pc poor to very poor. The sell off in futures is raising the potential for HRW to find Algerian business that would be supportive of nearby pricing. But other than that, there is no major bullish catalyst for the moment, on the other hand the risk reward in selling wheat down here is not overly appealing.

Corn

Corn was under pressure from wheat’s demise, in another low range session. Implied vol in the Dec contract went out at 12.92pc. Low ranges, high stocks, low demand will be ongoing factors for corn until we uncover a serious new crop concern.

Soybeans

Soybeans finished fractions above unchanged in a low range session. The chart shows that beans have been consolidating for the last 12 sessions, with buyers and sellers lacking conviction while they work out whether to make or kill the South American crop. Dec meal was down US20 cents per tonne, while oil was close to unchanged. The USDA’s Oilseed Crush report tomorrow is expected to show September figures at 3.94 million tonnes (Mt). Brazil’s weather has improved with 2.75-5.25mm expected over the next 10 days in Northern Brazil.

Canola

Canola recovered some of yesterday’s losses, finishing just below recent highs. Technically it looks quite strong and a higher close from here would suggest a push above Can$530/t in the Jan contract. A weaker CADUSD helped encourage export and crush bids.

Australia

The Aussie forecast features 15-25 mm of rainfall for a large portion of the NSW cropping region which could delay harvest progress and possibly cause some quality damage. Cash markets remain quiet, with the market needing growers to drive prices lower to meet the export market.

Source: Lachstock Consulting

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