Daily Market Wire 1 November 2018

Guest Author, November 1, 2018

Mixed for grains and lower for oilseeds.

  • CBOT wheat up 0.75c to 500.5c,
  • Kansas wheat down -1.5c to 493.25c
  • Spring wheat down -2.25c to 569.25c
  • CBOT corn down -1.5c to 363.25c
  • Matif corn up €1.5 to €172,
  • Soybeans up 4.75c to 851.75c
  • Winnipeg canola down C$2.60 to $486,
  • Matif canola up €1.75 to €375.75,
  • Dow Jones up 241.12 to 25115.76
  • Crude oil down 1.89 per cent to US$64.93 per barrel
  • AUD down 0.38pc to $0.7077,
  • CAD down 0.36pc to $0.75993,
  • EUR down 0.22pc to $1.13193


Wheat futures finished fractions higher in the Dec contract, but 1-3 cents lower in the deferred contracts. Early selling pressure saw futures down 9 cents but failed to push through last week’s lows.  Implied vol in Dec SRW finished at 22.25%, Matif Wheat was down -0.25€ to 198.5€, Black Sea Wheat was down -0.75$ to 234.25$ and the Ruble was down -0.58% to 0.0151. Winter wheat plantings in the US are progressing, thanks to favourable weather conditions. HRW continues to lack a demand story with it being $12-14 away from pricing any North African demand. Russian export pace continues to outdo expectations with 16mmt thought to be done by the end of Oct, if this maintains then we would see 28mmt by the end of Jan. But demand could come under pressure, as quality complaints are re-circulating out of Indonesia and Vietnam which may reduce the demand profile there. On top of that, Turkey have reportedly been shutting down flour mills, which will mark another blow to Russian demand, as they are the second largest wheat importer. Bullish potential in wheat appears to be something for late in Q1 next year.


Corn production concerns in the US are keeping things from unravelling too far, but export demand remains weak. The weather has provided a good window for US harvesters to finish off harvest. Looking at the bigger picture, the feed grain SnD is shrinking, particularly in China, where they continue to see good clearance results in their government auctions, this could be alter their import profile next year. Ethanol production was up 3.1% for the week. The market is looking to the Nov 8 WASDE report and what the USDA decides to do with US yields


Beans finished with mild gains, overcoming early selling pressure to finish 9 cents off the lows. Soybean Meal was up US$1.3 per tonne and Soy oil was up 0.02 points. There was nothing noteworthy from a news perspective, the market is still grappling with increased US ending stocks and a declining demand profile.


Canola finished mixed across the two contracts, with Matif gaining on Winnipeg. Its difficult for Canola at present, given its tie to US beans and a decreasing Chinese oilseed import profile. They are preferring to import Canola meal from Canada which has disrupted the export relationship.


Aussie markets were stronger yesterday in wheat with ASX finishing $1.50 higher as the market quantifies early yield results and concludes that harvest might be over quickly and any liquidity is a buying opportunity. Barley prices were a bit softer with growers favouring it as an off-header sales opportunity. Weather wise we are looking at 15-25mm with decent coverage across SA, VIC and NSW. This could create some harvest delays but will do nothing for winter crop production.

Source: Lachstock Consulting


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