Overview of futures markets:
Lower across the board for grains and oilseeds as the USDA released updated crop production figures, global SnD’s and US ending stocks.
- CBOT Wheat was down -1.5c to 426c,
- Kansas wheat down -3.75c to 453.25c,
- corn down -5.5c to 359.75c,
- soybeans down -10.75c to 1000.25c,
- Winnipeg canola down -0.70$C to 529.5$C,
- Matif canola down -0.75€ to 415€.
- The Dow Jones up 3.74 to 20859.47 ,
- Crude Oil down -0.539c to 49.74c,
- AUD down to 0.750c,
- CAD up to 1.350c, (AUDCAD 1.013)
- EUR up to 1.058c (AUDEUR 0.709).
Soybeans under moderate pressure as US carryout increased 0.435 million tonnes (Mt) from previous estimate, while global carryout increased by 2.44Mt to 82.82Mt. Brazilian production was increased by 4Mt to 108Mt. The nearby contract finally broke technical support closing below its 200-day moving average.
Canola had a mixed session, closing slightly lower despite a weaker Canadian dollar. Weakness from soybeans and palm oil were the drivers.
Wheat SnD’s and ending stocks had no major surprises, stocks were effectively unchanged while global stocks increased by 1.33Mt. With crude oil lower again the Ruble is weakening which is seeing price declines in Russian fob values (approx. USD$2/t), considering the large amount of unsold farmer tonnes sitting above the market, ongoing Ruble weakness could have bearish consequences on export pricing as they shift old crop in preparation for new crop harvest in July.
Balance sheet weight put pressure on corn futures, which have an extra 3Mt of global carryout, as a result of 5Mt increase in Brazilian production and 1Mt increase in Argentinian production. The US stock situation was unchanged on last months forecast, which could see surprises later in the year considering strong reported domestic consumption. Like beans the nearby contract traded below its 200-day moving average which could be the catalyst for further price weakness.
The rain forecast for central and northern NSW remains on the 8-day forecast and looks to be increasing. The northern cash markets do not appear to be overly responsive to this, in spite of recent showers and the reasonable forecast. Current price spreads are drawing grain from southern areas which would not be expected given our record winter crop production. The AUD was slightly lower again, but importantly it broke key technical support levels which may suggest further weakness. Aussie cash markets for wheat and barley remain strong despite weaker futures, on a weaker dollar and lack of grower selling. Rumours of increased Chinese feed barley buying helping the market to find a bid.
Source: Lachstock Consulting