Daily Market Wire 10 July 2018
Lower for grains and oilseeds.
- CBOT wheat down 7.25c to 508c,
- Kansas wheat down 7c to 506c,
- Corn down 6.25c to 354c,
- Soybeans down 21.75c to 855.75c,
- Winnipeg canola down C$4.89 to $506.30,
- Matif canola down €3.5 to €358.25,
- Dow Jones up 320.11 to 24776.59,
- Crude oil up US$0.17 to $74.02 per barrel,
- AUD up to 0.746c,
- CAD up to 1.311c (AUDCAD 0.978),
- EUR up to 1.174c (AUDEUR 0.634).
Wheat finished in the red after three days of price strength, following weakness in corn and beans. Implied volatility in September Soft Red Winter wheat went out at 29.625 per cent. CBOT wheat has a gap 15 cents below current levels, which it looks tempted to fill, though it’s hard to see aggressive selling in wheat ahead of USDA’s release Thursday of the July World Agricultural Supply and Demand Estimates report. EU wheat values were down €1.5 with an improved forecast in the Ukraine and Poland adding some pressure, though it’s probably too late for rainfall to have a significant impact on crop development. In Russia, some early harvest results are suggesting 20pc yield declines, though there is still plenty of uncertainty remaining. Black Sea fob markets remain well bid with limited selling.
Corn conditions came in at 75pc good to excellent, down from 76pc last week. Forecast warm conditions for parts of the corn belt have drifted west, which has left most production regions with moderate temperatures and excellent subsoil moisture. Export inspections came in at a strong 1.44 million tonnes (Mt). Commitment of Traders (COT) report data for corn showed an increase in the short position from 8000 to 35,800 contracts.
Beans gave back half of Friday’s gains as the political boxing event continues. China has reduced bean import taxes on five Asian countries in an effort to avoid needing US supplies, which will be a difficult strategy for it to acheive. Bean conditions came in at 71pc good to excellent, unchanged on last week. Soymeal was down $8.20 per tonne, while soy oil was down 16 points. The COT report had the bean short increase to 77,800 contracts from 75,500 contracts.
Canola followed beans lower, giving up most of Friday’s gains in a session that saw a lot of uncertainty with regards to price action.
Australian markets got off to a slow start yesterday, with east coast prices slightly higher thanks to a disappointing moisture forecast and increasing export potential in South and Western Australia. The Saudi Arabian barley revealed values below expectations as one counter-party, Holbud, took out 65pc of the 1.74Mt demand. This company loves to short this tender to take out the demand and use its ships, but the balance sheet is becoming less forgiving in barley, and they are playing a very dangerous game. Aside from 10-15 millimetres in southwest Victoria, the eight-day forecast continues to show limited moisture. Crop conditions in NSW are getting worse by the day, and the longer the eight-day forecast stays dry, the larger the volume of South and Western Australia grain that will be required.
Source: Lachstock Consulting