Daily market wire 16 February 2018

Lachstock Consulting, February 16, 2018

Overnight futures markets

Higher for grains, mixed for oilseeds.
  • CBOT wheat up 6c to 461.75c,
  • Kansas wheat up 8.25c to 478c,
  • Corn up 0.5c to 367.75c,
  • Soybeans up 7.25c to 1035c,
  • Winnipeg canola down C$2.69 to $505.8,
  • Matif canola down € 1.25to €349.5,
  • Dow Jones up 233.23 to 25126.72,
  • Crude oil up 0.96c to $US61.57 per barrel,
  • AUD up to 0.793c,
  • CAD down to 1.248c (AUDCAD 0.990),
  • EUR up to 1.250c (AUDEUR 0.634).


Wheat finished higher, with another risk off-style trading event, as funds continued to head for the door. A weaker USD helped support values later in the session, but the major catalyst again was Hard Red Winter (HRW) wheat weather. The most optimistic outlook for now will see light showers in the eastern parts of the HRW belt. Export sales came in near expectations at 311,000 tonnes. Matif futures were up €0.75, while Russian values continue to climb higher, with March now at US$200/t free on board (fob). US markets will be closed on Monday for a public holiday, so fund support could continue ahead of their long weekend.


Corn finished fractions higher in a quiet session that featured a US3c/bu range. Export sales came in at 1.97 million tonnes (Mt), well above trade expectations at 1.25Mt and well above the USDA’s required figures. US corn is still managing to do the lion’s share of export business, and this will continue until Brazil’s crop can compete. Brazil’s crop size remains one of interest, with a large variation in acreage and yield forecasts.

European and Black Sea barley values were supported overnight, thanks to the Saudi government announcing a tender for 960,000t for April to first-half May arrival.
Monthly supply-and-demand figures suggest 16 cargoes will be reasonably hard to source for this period; as a result, fob premiums responded with offers running away.
On top of the Saudi tender, Chinese cost and freight (candf) bids have continued to increase over their holiday period, with supplies tightening in Australia, and US sorghum no longer an option.
The Saudi tender should price French values out of China, which leaves only Australia, where the grower is predominantly sold in WA and SA, leaving Victoria as the most likely candidate for export demand.


Soybeans closed stronger, as Argentine weather continued to drive meal prices higher. Export sales were at market expectations at 640,000t. Argentina’s National Oilseed Processors Association (NOPA) crush figures for January have come in at 2.4m bushels below market ideas. Soymeal was up US$3.80 per tonne, while oil was down 11 points.


Canola closed lower, unable to follow the strength in beans, with reduced crush NOPA crush figures prompting the weaker tone.


Australian markets were quiet yesterday, with the local currency preventing active grower or exporter activity.
Increased premiums for protein wheat have been noted, with the possibility of Indian and Middle Eastern demand combining with the dire HRW situation to prompt a local bid.
The flat price increase in Russian values should edge us closer to finding some Indonesian demand, though that market has been very quiet of late.
Northern markets remain well bid, with sorghum strength continuing, while wheat and barley supplies remain tight in NSW due to the dry new-crop outlook.


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