Overnight offshore markets:
Mixed for grain and oilseeds, as conflict in Syria creates political instability.
- CBOT Wheat was up 0.75c to 424c,
- Kansas wheat up 1.75c to 421.75c,
- corn down -1.25c to 359.5c,
- soybeans up 0.5c to 942c,
- Winnipeg canola up 3.40$C to 489.1$C,
- Matif canola down -3.25€ to 398.75€.
- The Dow Jones down -6.85to 20656.10,
- Crude Oil up 0.589c to 52.29c,
- AUD down to 0.749c,
- CAD down to 1.339c, (AUDCAD 1.004)
- EUR down to 1.058c (AUDEUR 0.707).
Soybeans were flat a in a session lacking anything exciting on the fundamental front. Prices have found support at current levels as concerns are raised with regard to the forecast rainfall in Argentina. This Tuesday the USDA will update their old crop SnD’s with speculation that carryout’s will increase. From the demand front, Chinese enquiry has been limited, which makes sense considering the large amount of global supply needing to find a home. A large weekly movement in the Commitment of Traders Report (COT) was noted, with beans going from +10,300 contracts to -26,500 contracts.
Canola found a bid closing near the daily high, after copping selling pressure earlier on. Soy oil was stronger following crude, which provided support. On top of this local basis in Canada continues to strengthen as the reality of a tight old crop carryout sets in.
Corn slightly lower, as the technical picture continues to encourage the offer side of the market. The trade dispute between the US and Mexico continues with the Mexican government enacting policy to enable South American supply. On that note, the South American crop keeps getting bigger, the weather in the Midwest is clearing and growers are still sitting on old crop positions. Without a production upset it’s difficult to see significant price support. The weekly COT position in corn reduced from -149,300 to -138,500 contracts.
Wheat basically unchanged, all three US wheat contracts are sitting very close to their six month lows. Algeria bought 570,000t of wheat, with the majority expected to come from the EU. Weather wise, the global outlook has improved with the US wheat belt expecting more rainfall this week, the Ukraine’s dryness concerns have eased somewhat on an improved forecast, while the French crop is rated at 90per cent good to excellent. The COT had the wheat short at 157,900 vs. 157,600 the previous week.
The lower AUD dollar should encourage some action in cash markets today. Weather wise, Victoria has received some mild rainfall in key production areas, with more forecast for later in the week. Other than that the forecast is bare for the rest of the country.
Source: Lachstock Consulting