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Daily Market Wire 12 July 2018

by Lachstock Consulting, 12 July 2018
Lower for grains and oilseeds as tariff issues continue.
  • CBOT wheat down -20.25c to 471.75c,
  • Kansas wheat down -20.75c to 474c,
  • Corn down -7.75c to 340c,
  • Soybean down -22.75c to 833c,
  • Winnipeg Canola down 8.50$C to 494$C,
  • Matif canola down -1.75€ to 356.75€.
  • The Dow Jones down -219.20 to 24700.45,
  • Crude Oil up 0.20c to $US70.58 per barrel,
  • AUD down to 0.736c,
  • CAD down to 1.321c, (AUDCAD 0.972)
  • EUR down to 1.167c (AUDEUR 0.630).

Corn

Corn made new lows, caught up in the basket case of trade wars.

Speculation is building for a bearish World Agricultural Supply and Demand Estimates (WASDE) report, should the USDA take drastic action to US demand in light of these trade issues.

Wheat

Wheat copped it too, almost outpacing beans for daily losses. Implied volatility in Sep Soft Red Winter (SRW) wheat finished at 27.3pc.

European wheat futures were down €2.25/t to €178.50/t. This market is hard to comprehend, the global balance sheet is set to be significantly reduced in tomorrow’s WASDE report as production cuts continue in Australia, Europe and the Black Sea, yet we are at lows not seen since January last year.

The CBOT short is not big enough to prompt any short covering just yet, so it may need to build further, if consumers do not step in soon and recognise the opportunity that wheat is presenting.

Soybeans

Soybeans were under pressure, making new lows.

The Trump government is keeping the market on its toes after introducing plans to implement 10pc tariffs on an additional US$200 billion worth of Chinese imports into the US.

Tomorrow’s WASDE report is expected to be bearish for beans and corn if the current tariff cuts are factored into demand flows.

This latest twist has encouraged further fund selling and with shorts not yet at record levels, we could see further movements as bearish momentum builds.

Soymeal was down $1.70/t while soy oil was down 56 points.

Canola

Canadian canola was hit hard by a very weak vegoil market that was prompted by tariff issues, a positive Canadian weather forecast was also added some weight to the offer.

This was in spite of a weaker dollar that was down 0.7pc as risk off selling saw a rush to safer assets amidst the sea of trade uncertainty.

European values were lower, but showed more resilience than Winnipeg, with ongoing production issues in Europe preventing bear trap selling.

Australia

 Aussie markets picked up yesterday in export states and the east coast.

Crop production figures continue to decline with a dry 8-day forecast and interstate import volume continue to grow.

Our exportable surplus is shrinking daily, but price in the export states is not responding enough to reduce exports to which could affect domestic consumption as the season progresses.

Source: Lachstock Consulting

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