Daily market wire 11 December 2017

Friday’s futures markets:

Lower for wheat and oilseeds.

CBOT wheat down 2.5c to 419c,
Kansas wheat down 2.75c to 418c,
Corn up 1.25c to 352.75c,
Soybeans down 2.25c to 1001.5c,
Winnipeg canola down 80c to C$505.10,
Matif canola down 0.75€ to 364.75€,
Dow Jones up 117.68 to 24,329.16,
Crude oil down 67c to US$57.36 per barrel,
AUD down to 0.750c,
CAD down to 0.77c (AUDCAD 0.964),
EUR down to 1.177c (AUDEUR 0.637).

Wheat

Wheat has liquidity problems stemming from adequate supplies and lethargic demand. Funds were net buyers of winter wheats last week with the Commitment of Traders (COT) report changes as follows: Soft Red Winter (SRW) up 3,900 to -118,800 contracts; Hard Red Winter up 2,900 to -21,300 contracts; spring wheat down 2,300 to 3,100 contracts. Implied volatility in March SRW went out at 17.66 per cent. Wheat is in search of fundamental support, which the USDA may provide in their report on Wednesday. If this doesn’t show up, then funds have a free rein to continue to drive it lower. Spring wheat finished unchanged in a low range, low volume session.

Corn

Corn continues to stay strong amid a sea of weakness from outside markets. This is surprising, given the large projected carryout, length still held by farmers, and average export demand. Pillars of this support have been ethanol demand and market structure. The COT covered 36,100 contracts last week, giving them a net short position of 161,000 contracts. The USDA will announce US ending stocks in their report on Wednesday, though the market is not expecting any major surprises. The Buenos Aires Grain Exchange (BAGE) called Argentinian corn planting 40.4pc completed.

Soybeans

Beans finished softer in a low-range session, with risk profiles decreasing on long-term improvements in the forecast for Argentina’s weather. The USDA announced a flash export sale of 268,000 tonnes to China, though this could not support the market because ideas had built that Argentinian producers would switch corn area into beans, given lower bean margins. Soymeal was down $3.50, while oil was 29 points higher. The BAGE has estimated Argentinian planting to be 53.2pc done. The COT report revealed an increase in the fund position to 53,000 contracts, up 21,400 contracts week on week.

Canola

Canola closed slightly lower with a weaker currency unable to overcome pressure from outside markets. Despite the poor price performance of late, canola is respecting nearby technical support.

Australia

Aussie weather looks to have behaved over the weekend, which should provide a notable increase in harvest pace this week. Cash markets remain mixed in wheat, with growers and traders lacking enthusiasm until the crop is off and the quality profile is understood. Some export demand would also help. Barley continues to fire as Chinese feed demand increases, while the delayed harvest has prompted price increases to guarantee ownership for harvest slot shipment.

Source: Lachstock Consulting

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