Daily market wire 13 November 2017

Lachstock Consulting, November 13, 2017

Friday’s futures markets:

Higher for grains, mixed for oilseeds

  • CBOT wheat up 2.5c to 431.5c,
  • Kansas wheat up 4.25c to 433.25c,
  • corn up 2c to 343.5c,
  • Soybean up 2c to 987c,
  • Winnipeg Canola down -0.399$C to 515.1$C,
  • Matif canola down -0.25€ to 380.75€.
  • The Dow Jones down -39.72 to 23422.21,
  • Crude Oil down -US$0.27 to $56.90 per barrel,
  • AUD down to 0.765c,
  • CAD up to 1.268c, (AUDCAD 0.970)
  • EUR was down to 1.165c (AUDEUR 0.656).


Wheat posted minor gains with weakness in calendar spreads not suggesting a Variable Storage Rate trigger during this observation period. Implied volatility in December Soft Red Winter wheat futures went out at 16.5 per cent. The wheat market is seeing good export demand; Algeria purchased 210,000t of wheat at prices between US$210-$211.75/t cost and freight, while Tunisia, Morocco and Turkey are all in the mix for nearby demand. Black Sea cash prices were a touch weaker, though it’s difficult to define with a lack of nearby export capacity. USDA lowered Indian imports to 3 million tonnes on account of the newly imposed 20pc import duty that was lifted from 10pc.


Soybeans posted minor gains, with narrow trading ranges after Friday’s sell off. Soymeal was up US$2.70 per tonne while soy oil was down 33 points. Year to date US export pace is 12.9 per cent lower than last year. South American production uncertainty is preventing a drastic sell off and will be the catalyst for direction going forward.


The USDA justified corn’s weakness, presenting a bearish report with old crop yields revised up 3.5pc from the yield estimate in its August report. Year to date exports are lagging last year by 21pc. As is the case in beans, South American production concerns are the only major near-term price support.


Canola basically unchanged in a quiet session as the market considered future direction after Thursday’s sell off. Crush margins have declined on the recent run up, which is discouraging demand and limiting trade volumes.


The Aussie market has seen limited grower selling thus far in cereals, as early quality issues present in both wheat and barley on account of frost damage. The weather forecast features 15-25mm of rain in parts of Vic and NSW which will delay harvest. Cash markets are slightly weaker for cereals, whilst canola basis has firmed on lower production and improved export prospects.


Source: Lachstock Consulting


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