Overview of futures markets:
Mostly lower for grains and oilseeds.
- CBOT Wheat May contract was unchanged at 430.5c,
- Kansas wheat May contract down -0.25c to 442.5c,
- corn May contract up 1.25c to 362.25c,
- soybeans May contract down -6.75c to 999.25c,
- Winnipeg canola down -3.70 $C to 514.2$C,
- Matif canola down -1.5€ to 406.25€.
- The Dow Jones down -44.11 to 20837.37,
- Crude Oil up 0.74c to 48.46c,
- AUD down to 0.755c,
- CAD down to 1.348c, (AUDCAD 1.0189)
- EUR down to 1.060c (AUDEUR 0.712).
Forecast rainfall for hard red winter (HRW) wheat areas in the next 8-15 days continue to add pressure to wheat. Open interest is increasing, suggesting that funds are increasing their short positions. Despite the selling in wheat, global demand is still strong with Saudi Arabia recently purchasing, plus Algeria and Tunisia tomorrow. With the short growing and a lot of production ‘what ifs’, its hard to see wheat forging new lows in the near term.
Soybeans continue to see pressure from increases in the South American crop size, the market switches its focus from the large crop, to the logistical issues associated to exporting it. In spite of this, the market is respecting technical support, which saw beans rally of their lows over night.
Canola followed beans lower, despite a lower Canadian dollar and higher bean and palm oil prices. The nearby contract looks poised to test recent lows.
Corn managed a slightly higher close on the back of fresh export sale announcements and rumors that China have bought 3-6 cargoes of US origin corn.
In Australia, rainfall for NSW and Qld is still on the forecast. With Queensland recently receiving 10-25 mm across key cropping areas. No other major developments, the more rain we receive the better winter crop potential there is, which should settle northern markets eventually. Perhaps the southern market rally is reducing the drawing arc and keeping things strong.
Source: Lachstock Consulting