Overnight futures markets:
Lower again, for grains and oilseeds.
- CBOT wheat down -5.5c to 413.5c,
- Kansas wheat down -5.25c to 412.75c,
- Corn down -3.75c to 349c,
- Soybean down -7.5c to 994c,
- Winnipeg canola down -2.60$C to 502.5$C, and
- Matif canola down -2.25€ to 362.5€.
- The Dow Jones up 51.22 to 24380.38,
- Crude Oil up 0.63c to 57.99$ per barrel,
- AUD up to 0.752c,
- CAD up to 0.777c, (AUDCAD 0.967) and the
- EUR was up to 1.177c (AUDEUR 0.639).
Corn had nowhere to go, as wheat and beans sold off. On top of this we saw a 25pc reduction in weekly export sales, which came in at 586,000t. The market is expecting a slight reduction in US ending stocks from tomorrow’s WASDE report, though it is only small at 230,000t. Ethanol demand is the major supporter of corn at present, holding it up against a sea of weakness in outside markets. Speculation is building that the Trump government is attempting to amend biofuel policy to ease the burden on oil refineries. Though it’s hard to speculate on the outcome, a change like this would be detrimental to corn pricing.
Soybeans were lower again today on an improved weather forecast for Argentina and southern Brazil. Meal suffered the most falling $4.1/t, while oil was down 21 points. Tomorrow we will see a a report from (Brazilian forecasting agency) CONAB and WASDE, with the market expecting lower exports. If we can discount the weather issues in South America, then there is no problem for beans, presuming lower exports and trend acreage next year. As a result the sellers are in the driver’s seat, but it’s unlikely that the South American story is over yet.
The Aussie market remains reasonably quiet, with weather delays preventing farmers from having confidence in quality and volumes. Export demand is not encouraging traders to step up to the blocks on wheat, which makes for a fairly quiet market. Barley is well bid in malt and feed on account of quality issues and ongoing Chinese demand. The 8-day Bureau of Meteorology forecast is calling for 15-25mm of rain for SA and Victoria which should cause further delays and quality issues.
Source: Lachstock Consulting