Daily market wire 15 May 2017

Lachstock Consulting May 15, 2017

 Overnight markets:

Mixed for grains and lower for oilseeds.

  • CBOT Wheat down -1.25c to 446.75c,
  • Kansas wheat down -1.75c to 456c,
  • Corn up 1.75c to 379c,
  • Soybean down -3.25c to 964.75c,
  • Winnipeg Canola up 4.60$C to $523.90C,
  • Matif canola up 0.75€ to 370.5€,
  • The Dow Jones down -22.80 to 20896.61,
  • Crude Oil down -0.05c to 47.79c,
  • AUD up to 0.738c,
  • CAD up to 1.371c, (AUDCAD 1.012),
  • EUR own to 1.092c (AUDEUR 0.676).


Wheat incurred slight losses in a lacklustre session. Volatility dropped slightly to 21.5pc in the nearby contract. Fundamentals inputs were limited, with export demand slowing ahead of the northern-hemisphere harvest. Informa called spring wheat acres at 10.8m vs. USDA at 11.3m; there is potential for a global protein story in new-crop wheat, but there is still a lot of production to get through beforehand. Further rainfall for the delta region is expected to slow SRW progress, and raise concerns for fungal diseases. The Commitment of Traders (COT) story is declining in wheat as the short manages to reduce without moving prices too much. Wheat came in at -136,800 vs. -150,900 contracts last week.


Soybeans closed lower with some technical selling, combined with improved planting conditions in the US. China inquiry has picked up, though most of the business looks to be pricing out of Brazil. Despite recent pick-ups in basis on the back of limited grower selling, things seem to be softening as harvest volume increases, and yield forecasts are realised and exceeded in South America. The COT report showed some covering of the bean short position last week, which moved from -70,400 to -59,500 contracts.


Canola rallied in both old and new crop contracts, with the majority of the strength felt in old-crop. Support came from higher soybean oil prices. The Canadian Oilseeds Processors Association (COPA) reported the year-to-date crush figure 14pc ahead of last year’s.


Corn featured slight gains in a session short of any major fundamental inputs. Wet weather has dissipated in major parts of the corn belt, and progress is expected to have caught up when reported this week. There are still acres that may need replanting, though that is not the market’s focus at present. The spec community keeps selling corn with the COT increasing from -198,000 to -225,200 last week.


The Australian forecast has improved slightly in WA, though the driest areas in central and northern WA may miss the rain. The western half of SA which needed the most moisture looks to be missing out on much of the forecast rainfall, though there is a lot around, which may change as it heads east. Victoria and NSW are set to receive 25-50 mm, which will provide a great start to winter crops, already well supplied with moisture. Cash markets are reasonably quiet for wheat, while barley remains well bid in feed and malt as Chinese export demand continues.

Source: Lachstock Consulting


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