Daily market wire 16 May 2018

Lachstock Consulting, May 16, 2018

Higher for grains and oilseeds.

  • CBOT wheat up 2.25c to 493.5c,
  • Kansas wheat unchanged at 509.75c,
  • Corn up 5.75c to 402.25c,
  • Soybeans up 1c to 1018.75c,
  • Winnipeg canola up C$1.29 to $533.5,
  • Matif canola up €0.5 to €352.75,
  • Dow Jones down 193 to 24706.41,
  • Crude oil down US$3.20 to $70.99 per barrel,
  • AUD up to 0.747c,
  • CAD up to 1.287c (AUDCAD 0.961),
  • EUR down to 1.183c (AUDEUR 0.631).


Wheat felt early pressure from the stronger USDA, but strength from corn helped it reverse a four-day losing streak. Implied volatility in July Soft Red Winter wheat went out at 24.25 per cent. Rainfall in the US southern plains appears to have been beneficial to wheat, which alleviates any supply concerns for the moment. Australia remains the only major weather concern for wheat.  There is some chatter about dry pockets of Russia and Canada, but nothing as substantial as the moisture deficits Australia is currently seeing. Egypt purchased 60,000 tonnes of Ukrainian wheat at $220/t fob for June shipment. Russian offers were scarce, given the tight shipping window so close to harvest.


Corn was the driving force behind today’s rally, as wet weather in the US disrupts seeding, forcing the market to trade lower area. Another bonus for corn is talk of Chinese area falling significantly in favour of beans, which would tighten China stocks even further, encouraging greater imports. More fund buying was noted today.


Soybeans were under pressure today with a higher US dollar and potential for higher US area due to wet weather disrupting corn and spring-wheat plantings. US soybean crush data for April was out, and revealed figures of 161 million bushels, slightly below last month’s figure, but tracking almost 16pc of last year’s figures. The political chatter continues, with tariff removal talks extending beyond soybeans into all US agricultural commodities. For now, it’s all still chatter, but a resolution appears to be on the way. Soymeal was down $5.30/t, while soy oil was down 13 points.


Canola managed a higher close, buoyed by chart support and a weaker Canadian dollar, which fell in line with other currencies in response to USD strength.


Aussie markets were higher yesterday, with northern domestic markets underpinning interstate feed export markets. The forecast remains dry, and the lower dollar will support old and new-crop cash pricing today. With nothing encouraging in rainfall forecasts, Australia’s grainbelt is now suffering production losses for every further day without rain, and while that continues, prices will stay supported.

Source: Lachstock Consulting


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