Overnight markets:

Stronger for grains and oilseeds.

What a day for grain and oilseeds, with all contracts rallying with large increases in daily trading ranges. The volatility glut we have witnessed over the last 9 months may be finally subsiding.

• CBOT wheat was up 10.75c to 453.75c,
• Kansas wheat up 7.75c to 465.25c,
• corn up 2.5c to 379.5c,
• soybeans up 3c to 934.75c,
• Winnipeg Canola up 4.099$C to 485.9$C,
• Matif canola up 2.75€ to 360.75€.
• The Dow Jones down -14.659 to 21359.9,
• Crude Oil down -0.469c to 44.26c,
• AUD down to 0.757c,
• CAD up to 1.326c, (AUDCAD 1.005)
• EUR down to 1.114c (AUDEUR 0.68).

Wheat

Wheat put in a performance, this time lead by Chicago, in what appeared to be a case of shorts saying, “Enough is enough” and heading for the door. Volatility in July closed at 26.75%. Spring wheat only finished 5 cents higher, but it did trade a 25cent range in the September contract. It appears that rainfall has arrived in the northwest areas, though it’s deemed too late to reverse damage to the crop. Global front features some rainfall in the black sea, while Europe remains hot and dry in Europe. The European story is becoming more concerning with Strategie grain reducing their production forecast by 1.1mmt to 141.6 mmt on account of hot, dry conditions.

Corn

Corn stronger on wheat strength and short covering, despite beneficial rainfall across moisture starved growing regions. In spite of improved moisture, the market is looking to hot conditions further out which could cause serious damage if realised during pollination. Weekly export sales were in line with expectations on old crop and behind in new crop.

Soybeans

Soybeans were stronger, prompted by supportive May crush data and stronger bean oil. Which came out of the blocks based on rumours that the EPA may increase their mandated biofuel usage. Export sales were neither here nor there, falling in line with expectations. Supply continues to burden the market despite strong demand signals. Structure and demand can keep beans supported, but the South American farmer can turn that around on the right day.

Australia

Australia’s forecast is slightly better in WA, with some minor (5-10mm) patchy falls received in the central Kwinana region. This is not enough to abate concerns and the forecast is only calling for coastal showers. The rest of the country is dry and getting increasingly thirsty. It’s a sellers market in old crop wheat and barley, with limited grower liquidity prompting questions over the crops size.

Source: Lachstock Consulting