Mixed for grains and oilseeds.
Wheat ran out of buyers in futures but flat prices continued to climb. Profit taking was noted as a catalyst for the price falls, though it’s difficult to see further selling ahead of the Russian export meeting later this week. Quality and volume concerns in Argentina are creating some angst after last week’s heavy rainfall. Implied vol in Mar SRW finished at 21.625%, Matif Wheat was down -0.75€ to 206.75€, Black Sea Wheat was down -0.25$ to 251.5$ and the Ruble was down -0.91% to 0.0149. Wheat COT had SRW -53.4 from -56.6k contracts and HRW -9.7k from -10.8k contracts last week.
Corn COT came in +29.8k from -14.1k contracts, highlighting that a lot has changed in two weeks ago when they were -77k contracts. Weather conditions in South America continue to promote good production, which should weigh on US prices.
Soybeans drifted lower with China’s purchases not enough to satisfy a significant decline in US ending stocks. The Commitment of Traders Report (COT) had beans -63.9k contracts from -64.1 last week. Soybean Meal was down US$-1.3 per tonne and Soy oil was down -0.33 points. Rumours were swirling that China were in the market for 3mmt of US corn, which seems strange given their large ending stocks, though we note the ambiguity of quality and volume in their stock position makes it unsurprising.
Cash markets remained firm on Friday with new barley demand prompting a price surge, as WA harvest winds down. Wheat markets remained well bid as export demand in the West kept things supported. On the East Coast, Open interest in the Jan ASX contract remains high and the weekends rainfall (50-100mm) across most of Victoria will have a negative impact on unharvested wheat which should reduce the supply of deliverable stocks. Its going to be a wild week pre-Christmas week, with local and global forces offering a lot of potential for increased volatility.
Source: Lachstock Consulting