Daily market wire 14 Dec 2016

Lachstock Consulting, December 14, 2016

lackstock1Mixed session for grains and oilseeds, with light volumes.

CBOT Wheat was up 0.25c to 417.5c, Kansas wheat up 0.5c to 426.75c, corn up 0.5c to 361c, soybeans down -3c to 1028c, Winnipeg canola down -2.10$C to 516$C, and Matif canola up 1.25€ to 414.25€. The Dow Jones up 114.77 to 19911.21 , Crude Oil up 0.05c to 52.88c, AUD up to 0.749c, CAD down to 1.312c, (AUDCAD 0.984) and the was EUR down to 1.062c (AUDEUR 0.7059).

Argentina’s forecast became wetter, with falls expected to begin in 5 days. This put pressure on beans, but corn stayed stronger in a fairly stagnant session. US Corn prices are supported by positive ethanol margins, which is helping corn to defy beans pressure. Rebalancing speculation also keeping corn supported, with some models suggesting a 110k contract shift in corn.

Chinese government has ordered 6 soybean crushing mills in Dongguan city to halt operations in order to prevent air pollution. Residents of the city complained to the government which in turn forced operations to be shut down before a central government inspection can be concluded later in the month. This has obvious impacts on oil and oilseed pricing, but the major impact is the corresponding shortage of feed brought on by the lack of meal crushed in the plant.

Wheat pretty quiet session, with lower volume. Some mild short covering spurred on by cold temps potential on the US plains. Forecast suggests potential winterkill damage in northern and western Kansas. Rebalancing chat is still prevalent, discouraging aggressive fundamental sellers.

Philippines feed buying group tendering for 56kmt of Aussie/black sea wheat for April/May arrival. Given the contraction we have seen between these two origins and the fact that Australia has a 10% advantage (does not have an import duty) we should see Aussie get this business. It will be interesting to see how much Australian traders discount this below APW replacement.

India’s new crop wheat harvest progress is 11.5% better than last year, their crop is expected to be 3 mmt higher than last years, at 96.5 mmt, with speculation that their mild conditions are not supportive of significant production increases. Any issue with their new crop will have a very positive influence on Aussie wheat demand from q2 onwards, when we have available shipping capacity.

Canola traded lower on light volumes, Canadian dollar slightly higher and charts looking weak from a technical perspective.

Source: Lachstock Consulting 


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