Daily market wire 17 May 2018

Lachstock Consulting, May 17, 2018

Mixed for grains, lower for oilseeds. 

  • CBOT wheat up 0.5c to 510.25c,
  • Kansas wheat up 4c to 532.5c,
  • Corn down 3c to 407.5c,
  • Soybeans down 18.75c to 1003.25c,
  • Winnipeg canola down C$5.5 to $515.5,
  • Matif canola down €0.25 to €358,
  • Dow Jones up 62.52 to 24768.93,
  • Crude oil up US$1.79 to $71.49 per barrel,
  • AUD up to 0.751c,
  • CAD down to 1.278c (AUDCAD 0.960),
  • EUR down to 1.180c (AUDEUR 0.636).


Consensus was reached that the market had eroded enough production premium for the moment, which encouraged some short covering. Implied volatility in July Soft Red Winter wheat went out at 24.47 per cent.  Aside from Australia, the global situation continues to see no major threats, with seeding access improving in Argentina, and adequate moisture in the US. Today was more about some mild short covering, prompted by technical buying, as chart support was uncovered.


Corn couldn’t maintain its early strength, as weakness in beans, combined with a better weather outlook in Brazil, forced a minor sell-off. Ethanol production figures revealed the highest daily production since February, at 1.058 million barrels per day.


Optimism for a dispute resolution on China-US trade discussions vanished overnight, with beans posting a decent move lower, reaching lows not seen since early April. Farmer selling in Brazil put pressure on fob premiums, as a weaker local currency there encouraged grower selling. Soymeal was down $5.7o per tonne, while soy oil was down a whopping 53 points, or 1.7pc.


Canola had a significant sell-off, reaching new monthly lows. Weakness in beans and vegetable oils were the major drivers. Funds for noted sellers today.


The Aussie market remains strong, with markets in Queensland and New South Wales setting the tone for higher prices, given the limited amount of old-crop supplies available to fall back on. The forecast is dry for the next eight days, but the longer-range model is calling for some moisture in Victoria and South Australia towards the end of May. No major new inputs exist for the Aussie market, as it is all driven off domestic factors for now, and the market quantifies the prospect of production losses caused by the late start to the season.



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