Markets

Daily market wire 12 July 2017

Lachstock Consulting, July 12, 2017

Friday’s markets:

Mixed for grain and oilseeds, ahead of USDA’s WASDE report out tomorrow, which publishes US old crop carry out and new crop yield expectations.

  • CBOT Wheat up 3c to 553c
  • Kansas wheat up 0.25c to 557.5c
  • Corn down -0.25c to 401.75c
  • Soybean up 4.5c to 1029.25c
  • Winnipeg Canola down -3.20$C to 527.20$C
  • Matif canola down -1.5€ to 376€
  • Dow Jones up 7.81 to 21416.33
  • Crude Oil up 0.68c to 45.08c
  • AUD up to 0.763c
  • CAD up to 1.292c (AUDCAD 0.986)
  • EUR up to 1.146c (AUDEUR 0.665)

Soybeans

The momentum finally slowed in soybeans, as they managed only a slightly higher close. Scattered showers in the Dakotas and the Corn Belt helped keep things in check. Brazilian farmer selling was fairly active, serving a reminder to the market that while there are potential issues in the US, there is still plenty of seed elsewhere. Conab calling the Brazilian crop 113.9 mmt.

Canola

Canola had a lull in momentum as a wet, mild nearby forecast for the prairies eased some yield concerns. Conditions look heat up again longer term, so this story is not over yet. The chart had an inside day, meaning that momentum is still building towards the upside. Basis in Canada is strengthening on rumours of Pakistani purchases. With no old crop to fall back on, new crop basis should see some hefty premiums before the new crop picture is known.

Corn

Corn basically unchanged as an improved weather forecast and profit taking put pressure on things. Technically corn has reached a new high, though today’s close is not convincing as a momentum indicator, given how close it still sits to key resistance. Conab brought Brazilian corn estimates up 2 mmt from last month to 96mmt, with more upside potential still to come. The South American crop refuses to be forgotten and it shouldn’t.

Wheat

Wheat had a mild session as the improved Dakotas forecast saw Spring Wheat settle slightly lower, though it did trade a 45 cent range! The forecast brought selling side pressure, but fund buying managed to recover things. Looks like the funds are long and going to keep pushing wheat, until their black box tells them not to. Fundamentally it makes not sense, so we will see whether fundamental volume wins out in the longer term. In physical markets Russian harvest delays are causing all sorts of trouble for traders short into Egypt, while Black Sea feed has increased in price ($180 fob) as Asia feed shorts struggle to cover. Aussie weather has very little on the forecast for the next 4 days, though the 8-day does feature some showers for south central WA, Easter, SA and West Central Victoria. None of this rain is drought busting, but it’s enough to keep everything going in the interim. Old crop wheat basis continues to edge higher, given new crop uncertainty and it still being close to full carry.

Barley

Not that it weighs heavily on the export market, but US barley has been ignored amongst the spring wheat hype. Conditions are at 51% good to excellent vs. 74% last year. This could see increased transfers in from Canada, which will reduce the exportable surplus there and add another element to an already incredibly tight global SnD.

Source: Lachstock Consulting

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