Daily market wire 10 Jan 2017

Lachstock Consulting, January 10, 2017


Strong for grains, mixed for oilseeds.

CBOT Wheat was up 4c to 427.25c, Kansas wheat up 5c to 438.5c, corn up 2c to 360c, soybeans up 10.5c to 1005.25c, Winnipeg canola up 0.89$C to 499.2$C, and Matif canola down -2.5€ to 412.75€. The Dow Jones down -76.419 to 19887.38 , Crude Oil down -2.19c to 51.8c, AUD up to 0.735c, CAD down to 1.322c, (AUDCAD 0.972) and the was EUR up to 1.056c (AUDEUR 0.6955).

There is no major fundamental input at this stage, the market is waiting for the report on Thursday, plus the grapple between index fund re-balancing and the spec community.

The USDA report will offer extensive fundamental inputs for grains and oilseeds with the Annual production report, quarterly grain stocks report, winter wheat seeding report and monthly WASDA snd balance sheet report.

Once non fundamental inputs are cast aside, the market should recommence trading the SnD and the inputs from the report.

Wheat had flash sales of 125k spring wheat sold to unknown, rumoured to be China. When combined with the 3 new China wheat vessels on the pnw line up, this could paint more of a bullish demand picture.  There is potential in the forecast for up to half an inch of rainfall in the HRW belt next week, which could help developing crops.

Soybeans closed up after Fridays sell off. Export inspections were positive, and Argy weather is back in focus. CONAB releases SAM production estimates

Canola traded lower for most of the session before strong buying allowed it to achieve a positive close. Canada crush volumes are up 15% on this time last year, which suggests ongoing demand and price support.

Corn closed higher with no major fundamental inputs, appears that funds have reduced a large amount of their shorts and index funds are set to purchase a descent portion this week (estimates of 50 k contracts). Corn still struggling to breach technical resistance as ethanol margins get squeezed and grower selling continues to dampen rallies.

Not hearing of any fresh news for Australia with harvest winding back, limited fresh consumer demand and the trade focused on executing q1 program.

Source: Lachstock Consulting 


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