Daily market wire 15 December 2017

Overnight futures markets:

Mixed for grains, lower for oilseeds.

CBOT wheat up 1.5c to 418.25c,
Kansas wheat up 2c to 418.25c,
Corn down -0.5c to 348.5c,
Soybean down -11.75c to 978.75c,
Winnipeg canola down -4.69$C to 494$C,
Matif canola down -0.75€ to 358€.
The Dow Jones down -54.20 to 24531.23,
Crude Oil up 0.46c to 57.07$,
AUD up to 0.767c,
CAD down to 1.275c, (AUDCAD 0.978)
EUR was down to 1.178c (AUDEUR 0.650).

Wheat

Wheat posted mild gains in a very quiet session that featured a 3.5-range. It is still catching support after last week’s heavy sell off. Export came in at 588,ooo tonnes, which was above expectations and 83 per cent higher than last week’s figures. Wheat futures are getting support as the market thinks flat price has done enough work for now, to increase US wheat’s share of the export market. The fund short position is now thought to be -150,000 contracts, which is large enough to spark a rapid turnaround if we get a bullish catalyst. The problem is there are not many of those around; Russian weather remains warm and dry, which is supporting their staggering export pace, while consumers remain hand to mouth. Implied vol in Dec SRW went out at 17.6pc.

Corn

Corn finished fractions lower in another session, featuring a dismal range at 2.75 cents. Weekly export sales were lower than expectations at 866,000t which is slightly lower than last week’s figures and 42pc below this time last year. The improved South American forecast is adding weight, which is seeing funds flow out of corn into other commodities.

Soybeans

Beans broke ground again last night, pushing to and settling right on technical support at 967. The forecast in for Brazil and Argentina remains wet and is helping to reduce risk premiums in their crop production. Soymeal was $3.40/t lower, while oil was down 19 points. Weekly sales scraped in on the lower end expectations at 1.42 million tonnes (Mt), which was down 28pc on last week. Looking forward we have a NOPA crush report out tonight, which may be the next fundamental driver.

Canola

Canola cannot take a trick, getting caught up in the bean led oilseeds weakness. It also came under pressure due to a stronger Canadian dollar, which rallied 0.5pc. With futures falling as they have in the last three weeks, crush margins have improved and should encourage a larger export program, though we are not seeing it yet.

Australia

The Aussie weather forecast has some good rains penciled in for Northern NSW, which will support sorghum production there. Western SA still has 15-25mm forecast in areas that have endured constant harvest delays. Cash markets are quiet; the Aussie dollar is not helping, having rallied over 100 points in two sessions.

Source: Lachstock Consulting

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