Daily market wire 15 Dec 2016

Lachstock Consulting, December 15, 2016

lackstock1Modest gains for grains, mixed for oilseeds.

CBOT Wheat was up 0.5c to 418c, Kansas wheat up 4.5c to 431.25c, corn up 1c to 362c, soybeans down -4.25c to 1023.75c, Winnipeg canola up 0.20$C to 516.2$C, and Matif canola unchanged at 414.25€. The Dow Jones down -118.68 to 19792.53 , Crude Oil down -2.09c to 50.89c, AUD down to 0.7405c, CAD up to 1.327c, (AUDCAD 0.983) and the was EUR down to 1.052c (AUDEUR 0.7041).

AUD down 1.2% in response to the US feral reserve increasing US interest rates by one quarter of a percent, included in their comments was the expectation to have 3 more rate hikes in 2017, which should have a bearish influence on the Australian dollar.

Volume in wheat futures trade declining as we near year end. Recent wheat demand has helped to set a near-term floor in futures markets, when combined with questionable new crop conditions and the ongoing chatter of index fund rebalancing. Rebalancing and Jan USDA reports are keeping new shorts from entering the market.

India has bought 200 kmt black sea wheat since the removal of their tax, no reports of any Australian purchases thus far.

Kansas wheat stronger on forecast cold temps in parts of the HRW growing areas where snow cover is too light. In addition to this, reports out of Argentina suggest they are short on quality hard wheat, which will help secure HRW export demand.

Beans lower on improvements in Argentina’s forecast and yesterday’s news of Chinese plant closures, market still digesting this influence. Argy rainfall continues for Sunday and Monday in southern region.

Corn defied beans again and did not follow its falls. Corn appears strong from a technical perspective with good buying support. Positive ethanol margins, rebalancing and the feeling that most of the bad news is factored is not encouraging any new shorts.

Canola started the day weak, but firmed later in the session to achieve small gains. The driver of this was a weak Canadian dollar and strength in palm oil.


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