Daily market wire 13 December 2017

Overnight futures markets:

Lower for grains and oilseeds.

CBOT wheat down -2.75c to 410.75c,
Kansas wheat down -1.5c to 411.25c,
Corn down -1.25c to 347.75c,
Soybean down -6.75c to 987.25c,
Winnipeg canola down -2.39$C to 500.1$C
Matif canola down -1.75€ to 360.75€.
The Dow Jones up 123.35 to 24509.38,
Crude Oil down -0.73c to 57.26$ per barrel,
AUD up to 0.756c,
CAD up to 1.286c, (AUDCAD 0.972)
EUR was down to 1.174c (AUDEUR 0.643).

Wheat

The slide continues in wheat, with the market now looking to the Jan 12 acreage report for a potential shift in sentiment. The USDA had no major surprises in wheat, cutting US wheat exports cut by 680kmt and increasing Russian exports to 33.5mmt. Wheat was up 5 cents at one stage, as shorts covered after failing to forge new lows post report; like corn this could not be sustained. Implied vol in Mar SRW went out at 18.75%. GASC booked 295kmt of wheat from Russia and Romania at prices ranging between $207.89-$209.15 CFR. HRW finally saw some demand with Algeria purchasing 120kmt, with more expected next week when weekly sales are reported. Same old story in wheat, it feels like we are getting towards the low end of the range, but funds are paying no attention and cash markets have detached.

Corn

Corn suffered mild losses, but held up well considering the weakness in beans and wheat. The USDA brought US carryout down, by increasing ethanol demand 50 million bushels. This was deemed bullish by the market and prompted a small rally, before selling off on the USDA’s higher than expected global carryout figure. South America’s weather improvements could not help to sustain the attempted corn rally, which will cap things going forward, in the absence of a perceived problem. CONAB’s Brazilian corn forecast was down ever so slightly at 92.2mmt.

Soybeans

Soybeans lower with the USDA and CONAB reports combining with an improved Argy forecast to increase selling pressure. The USDA cut their US export forecast by 680kmt, which resulted in increased ending stocks. CONAB increased the Brazilian crop to 109.2mmt, which was 1.7mmt higher than their last estimate. Some support was noted in beans as oil rallied initially in response to the USDA increasing soy oil biodiesel use 500 million pounds; though the oil market could not sustain this. Soymeal was down 50 cents/tonne, while soy oil was 23 points lower.

Canola

Canola was lower again, as it continues to fall in line with soybean/oilseed complex weakness. A stronger dollar offered no assistance.

Australia

The Aussie forecast has eased off from yesterday, with potentially harmful rains for Vic and SA disappearing from the forecast. Cash prices are holding up in wheat, despite the futures weakness, with weather-affected grades finding a bid. Feed and Malt barley remain strong thanks to ongoing Chinese demand. Sorghum prices have found some support, getting within striking distance of export demand, with inner downs crops not supportive of the record crop the market is calling for.

Source: Lachstock Consulting

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