We find ourselves waiting in anticipation for some market direction which may be provided in the upcoming WASDE report.
CBOT Wheat was up 9c to 403.75c, Kansas wheat up 4c to 407c, corn up 3.75c to 353.25c, soybeans down -1.5c to 961.5c, Winnipeg canola unchanged at $C469.8, and Matif canola up €3 to €380.5. The Dow Jones up 88.55 to 18329.04 , Crude Oil up 1.35c to 51.16c, AUD up to 0.7606c, CAD down to 1.3170c, (AUDCAD 1.0017) and the was EUR down to 1.1137c (AUDEUR 0.6826).
USDA estimates currently put India’s wheat production figures at their lowest levels since the 2012/13 marketing year.
This, coupled with the fact that their domestic consumption has increased considerably has raised import ideas from 2mil to 3mil with some divisions of the market up to 5mil.
In previous years India have predominantly imported from France and Australia but with the production decrease in France the door has reopened for Ukraine. The last time India imported from Ukraine was 10 years ago.
The overnight strength displayed by corn was predominantly on the back of a strong showing by wheat and the fact that corn is excessively short at present.
The upcoming WASDE report is going to prove to be the determining factor in corn’s future position in the market.
The bean market also waits in anticipation for Wednesday with big yields expected. Overnight the bean market witnessed a brief moment of euphoria, based on what appeared to be Chinese pricing, before coming back down to earth to return to liquidation.
Domestically, new crop ASX wheat has strengthened $1.50 to $239 overnight, $8 higher than the start of October on the back of quality and protein concerns coming out of NSW.
The eight day forecast remains relatively friendly for Victoria and NSW with no more than 25mm expected to fall in any cropping regions.
We are currently witnessing a significant inverse in regards to old crop prices vs new crop with 2015/16 wheat delivered Victorian domestic homes $20-25 over new crop delivered prices.
This is due to the ability to access grain within the bulk handling system, coupled with a potentially delayed harvest for the 2016/17 season.
- Source: Lachstock Consulting