Grains markets were up and oilseeds mostly lower overnight;
- Chicago wheat July contract up US12.25 cents per bushel to 437c;
- Kansas wheat July contract up 10c to 397c;
- Minneapolis wheat July contract up 1c to 518c;
- MATIF milling wheat September contract closed down €0.25/t at €168.75/t
- Corn July contract up 4.75c to 356.5c;
- Soybeans July contract down 6.75c to 802.5c
- Winnipeg canola July contract up C$0.10/t to C$435.90/t;
- MATIF rapeseed August contract down €2.25/t to €358.5/t;
- Dow Jones down 617.38 points to 25,324.99
- Crude oil June contract down 0.82 to US$60.84 per barrel;
- AUD down to 0.6954
- CAD down to 1.3466
- EUR up to 1.1235
Market commentary
Markets snapped back last night driven by not much more than lack of sellers – its been a relentless move lower and, as the technicals will show, by every metric they are over sold. While it’s conceivable they can stay that way moves like last night suggest someone is paying attention. The crop condition and progress report isn’t released until post the close so the fact that only 30% of the corn crop is in the ground vs the average of 66% didn’t influence the market last night. Wheat fundamentals have long been discussed and remain bearish – the question at the moment is can corn planting delays be enough to crowbar the short out of their position in both wheat and corn. To put this in context we have planted 27.8m acres of a predicted 92.8m acres. Assuming we ended up 4m acres short and yield dropped from 176 to 172 – that equates to 1 bbu of carry out..
Australia
Domestically the weather patterns are setting up as southern east coast only. A long way to go and still plenty of time but the trend of building moisture into Vic and SA at the expense of WA, NSW and QLD is evident. The 14-day outlook looks excellent for SA, including the EP and right through Vic but, according to the BOM, the rain stops at the border to NSW. The USDA suggest we will grow 22.5mmt of wheat this season which would need WA and NSW to produce around 8mmt and 5mmt respectively – still achievable but the balance sheets need a drink.
Source: Lachstock Consulting
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