Lower for grains and oilseeds.
- CBOT wheat down 5.75c to 502c,
- Kansas wheat down 9.75c to 487.5c,
- Spring wheat down 6.75c to 573.25c,
- CBOT corn down 3.75c to 369.75c,
- Matif corn was down €1 to €171.75,
- Soybeans up 7.75c to 886.75c,
- Winnipeg canola was up C$0.59 to $482.40,
- Matif canola up €3.5 to €380,
- Dow Jones down 201.92 to 25989.3,
- Crude oil down to US$60.19
- AUD down to $0.721,
- CAD up to $0.757,
- EUR down to $1.132.
Wheat futures took a hit, with Black Sea paper longs having to discount the market to exit their positions. Implied volatility in December Soft Red Winter (SRW) wheat finished at 18.9 per cent. Matif Wheat was down €0.5 to €199.5 per tonne, while Black Sea wheat fell $2/t to $234, and the ruble dropped 1.53pc to $0.014. In the US, calendar-spread trades were eventful, with the carry structure likely to trigger a contraction in the variable storage rate. In the presence of low demand and weaker freight rates, this saw whippy trade. The weekly Commitment of Traders report had SRW positions at -65,500 from -66,900 contracts, and Hard Red Winter wheat 2,900 contracts. The wheat market is poised to test recent lows if we don’t uncover a large chunk of demand in the next few weeks.
Corn was hit by follow-through selling following the release on Thursday of the USDA’s World Agricultural Supply and Demand Estimates (WASDE) report. China’s stock increase was the surprise factor from the WASDE, but US yields were lower and helped prevent a negative close on the day. With an extra day to comprehend this, and with added weight from a soft wheat market, corn unravelled. The weekly COT report had funds at -16,900 from -33,300 contracts.
Soybeans found buying support on the hope of a trade resolution when Chinese and US officials meet later this month. The Commitment of Traders Report (COT) had beans -103k contracts from -132.6 last week. Exports continue to lag with year to date figures coming in 30.6% lower than those achieved last year. The progress of the Brazilian crop is going well, with AgRural estimating that 71% of the new crop has been planted. Soybean Meal was down US$-0.5 per tonne and Soy oil was down -0.4 points.
Aussie markets finished the week on a softer tone, with harvest pressure creating an oversupply of sellers versus buyers. Consumers have welcomed the sell-off, but now appear to be playing it cute as prices fall lower. It is important to note that this could turn around quickly once harvest liquidity subsides.
Source: Lachstock Consulting