Daily market wire 17 November 2017

Overnight futures markets:

Mixed for grains, mostly lower for oilseeds.

CBOT wheat was up 1.5c to 421.5c,
Kansas wheat down -0.75c to 417c,
corn down -1.75c to 336.5c,
Soybean down -4c to 983.25c,
Winnipeg Canola down -1.399$C to 525.1$C,
Matif canola up 1.5€ to 379€.
The Dow Jones up 193.389 to 23464.67,
Crude Oil down -0.140c to 55.19c,
AUD up to 0.758c,
CAD down to 1.275c, (AUDCAD 0.967)
EUR was down to 1.176c (AUDEUR 0.644).

Wheat

Wheat markets finished with spring wheat 5-6 cents/bushel stronger, while winter wheats were mixed. The range in Soft Red Winter wheat futures was very small at 5c/bu, as the market looks for new fundamentals to drive direction.

Export sales were reasonable, though not strong enough to push a bid.

Crop forecaster Informa called for lower 2018-19 US acres, with a 375,000-tonne reduction. Today the market was more focused on the here and now, with Egypt’s GASC tender lineup revealing that Russia remains the cheapest origin, though their prices have not declined despite recent weakness in the Ruble. Implied volatility in Dec SRW went out at 18.72 per cent.

Soybeans

Soybeans were slightly lower in a quiet session with a relatively low trading range. Buying was exhausted after the previous session’s oil-led rally, with lower than expected exports of beans, meal and oil not helping.

South American weather continued to offer production solutions, not problems. Informa called for a 600,000-acre reduction in the US next year.

Canola

Canola followed the softer oilseed complex, with slight losses in a quiet session, with a Can$2.60/t trading range. The Jan contract is still sitting near contract highs, though a large fundamental influence is required to push through what is now fairly heavy technical resistance.

Corn

Corn reached new seasonal lows in another quiet day, featuring a dismal 2.75c/bu range. Weekly exports were down almost 60pc on last week at only 949,000t. Informa called for 1 million additional US planted acres next year added to the already heavy balance sheet.

The fund position is getting very large, but there is no fundamental driver to threaten this trade.

Implied volatility in December corn futures was fractions higher at 14pc.

Australia

Rains in Victoria yesterday ranged between 25-75mm and will delay harvest and potentially damage quality. The crop can apparently stand one rain like this, but any follow up will result in sprouted grain etc.

In NSW there is 15-25mm forecast for a good portion of the grain belt, while QLD is set to receive 25-50mm which will increase the size of the sorghum plant.

Cash markets have a firmer feeling to them with limited grower activity and good demand prospects.

With much smaller crops this year, we can’t afford to be too cheap for too long. Once grower liquidity is out of the way, it will be a long year accumulating grain.

Source: Lachstock Consulting

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