Facebook Twitter

Daily Market Wire 13 July 2018

by Lachstock Consulting, 13 July 2018
Wheat finds strength as volatility continues. Corn, soybeans and canola all in the green.
  • CBOT wheat up 12.75c to 484.5c,
  • Kansas wheat up 7.25c to 481.25c,,
  • Corn up 5.75c to 345.75c,
  • Soybean up 0.75c to 833.75c,
  • Winnipeg canola up $C0.5 to $C,494.5
  • Matif canola up €3 to €358.75.
  • The Dow Jones up 224.4399  to 24924.89 ,
  • Crude Oil down -0.1499c to 70.18c,
  • AUD up to 0.74067c,
  • CAD up to 1.31662c, (AUDCAD 0.97521)
  • EUR down to 1.16642c (AUDEUR 0.6349).
The most recent USDA report was released overnight with much of the hype surrounding the trade war and numbers are based on the assumption that tariffs will be in place for the entirety of the 18/19 marketing season. As a result Chinese demand has been reduced.

Corn

Corn strengthened US5.75c/bu.

The global carryout was reduced by 20 per cent (pc) year-on-year in the USDA report, although production was increased on the back of higher acres (yields were unchanged).

A great deal of our current focus is on yield, which is hard to get right in early July, and the potential damage early season heat caused in the US.

Time will tell.

Wheat

Volatility remains true in wheat after a 12.75c rally overnight.

The USDA report that came out overnight was the first opportunity to include updated planted areas, as well as an opportunity to factor in the effects of tariffs on the US balance sheet.

The overnight rally comes on the back of the USDA peeling off 9 million tonnes off global production, including -4,5mil from EU, -2mil from AUS and -1.5mil from Russia.

It is important to note that the fact that the USDA have incorporated the effects of tariffs into their figures will provide a lot of wiggle room over the next couple of months.

Soybeans

Soybean numbers were less than attractive across the board.

US exports were pulled back 250 million bushels, resulting in an increase in ending stocks by 200 million bushels from the June report.

Chinese imports were cut by 8 million tonnes causing global ending stocks by 11 million tonnes.

Can China really import so few soybeans?

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

Back home in Australia we can expect a dry week in NSW and QLD with the 8-day forecast only showing worthy rainfall from the Riverina down through Victoria. Cropping areas of SA and WA may see up to 10mm which is only enough to keep things ticking over for now.

Source: Lachstock Consulting

Reader's Comments


Comment

Leave a comment

(First Name and Surname Required) - read our Comment Policy

(Required)

(Required)