Markets

Daily Market Wire 13 November 2018

Lachstock Consulting, November 13, 2018

Higher for grains and mixed for oilseeds.

  • CBOT wheat up 17.75c to 519.75c,
  • Kansas wheat up 6c to 493.5c,
  • Spring wheat up 9.25c to 582.5c,
  • CBOT corn up 1.5c to 371.25c,
  • Matif corn up €1.75 to €173.5,
  • Soybeans down 3.5c to 883.25c,
  • Winnipeg canola up C$0.60 to $482.40,
  • Matif canola unchanged at €380,
  • Dow Jones down 519.5 to 25469.8,
  • Crude oil down to US$58.85,
  • AUD down to $0.718,
  • CAD down to $0.755,
  • EUR down to $1.123.

Wheat

Wheat finished with sharp gains, led by Soft Red Winter (SRW) wheat contracts. Changes in storage economics have prompted a repositioning by funds, some of whom seem to be caught out by the contraction in SRW storage. This has left Hard Red Winter (HRW) wheat discounted by 26 cents to SRW in the Dec contract, due to the fresh new carry divergence between them at 8 cents per month on SRW, and 12c/month on HRW. Implied volatility in Dec SRW finished at 18.9 per cent. Matif Wheat was up €2.5 per tonne to €202, Black Sea wheat was up $3/t to $237/t, and the ruble was up 0.16pc to $0.0147. Export prospects for US wheat are slowly improving, and should see a squeeze point sometime late in Q1 next year.

Corn

Corn finished fractions higher, with US export potential increasing thanks to increases in Ukrainian fob premiums. Price pressure in the Ukraine has affected US corn over the past three weeks, as the realisation of a larger crop there was highlighted by heavy grower selling. This drove the global flat price down, but it has now stabilised at a point which makes US corn attractive again.

Soybeans

Soybeans were fractions lower in quiet trade that featured a six-cent range and low volume. Traders are tired of betting on beans due to the unquantifiable nature of China-US trade discussions. Until a resolution is reached, volumes will continue to decline as money managers see better rewards elsewhere for risk.  Soybean meal was unchanged and soy oil was up 0.09 points.

Australia

Aussie markets traded mixed to lower yesterday, as harvest pressure dominated markets in Western Australia and South Australia, which flowed into Victoria due to import parity. Malt selection in WA is coming in below expectations, which prompted a rally in the spreads yesterday. At some point, this premium will flow into Victoria and SA, but the higher prices of feed in these states is preventing an aggressive trade. Consumers have been cautiously buying this market, but with no export demand in Victoria, growers are having to chase delivered homes, warehouse, or sell for cash at unattractive low-ball levels. Weather-wise, we are looking 15 millimetres or more in northern New South Wales, which will assist prospects for its sorghum crop.

Source: Lachstock Consulting

 

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