Daily market wire 18 December 2017

Friday’s futures markets:

Mixed for grains and oilseeds.

CBOT wheat unchanged at 430.75c,
Kansas wheat down -1c to 430.25c,
Corn down -1c to 355.75c,
Soybean down -0.75c to 978c,
Winnipeg canola up 1$C to 495$C,
Matif canola up 1.75€ to 359.75€.
The Dow Jones up 143.08 to 24651.74,
Crude Oil up 0.32c to 57.36c,
AUD up to 0.765c,
CAD down to 1.286c, (AUDCAD 0.983)
EUR was down to 1.174c (AUDEUR 0.651).

Wheat

Sentiment appears to have switched in the wheat market, with export demand, revised new crop acres and a monster short combining to discourage any sellers. We have seen good demand with Iraq, Morocco and Algeria all holding recent tenders. A daily sale of 130,000t of Soft Red Winter wheat (SRW) was announced to unknown destination, which the market is speculating is feed wheat to Vietnam. There is talk of more business in the works. Implied volatility in March SRW went out at 18pc. Crop analyst, Informa, revised its new crop winter wheat acreage forecast down. The Commitment of Traders Report (COT) report revealed a short of -168,200 contracts vs. -137,000 contracts last week.

Corn

Corn finished lower led by the rainfall in Argentina. Informa are projecting US corn acres at 89.7 million acres, which is 1.74 million acres lower than their November estimate. Demand saw 89,700t of US corn to Costa Rica. The COT position increased to -238,100 contracts vs. -202,300 contracts last week. The combined COT positions in wheat and corn should prevent any monumental sell-offs in the near-term.

Soybeans

The much-anticipated weather forecast for Southern Brazil and Argentina began falling over the weekend, but given the price work the market had already done, this did not have much of an impact on beans. NOPA came out with record November crush at 163.55 million bushels. This was seen as a positive, however oil stocks were a lot higher than markets expectations, which added some early pressure, before biodiesel policy concerns helped oil catch a bid. Soymeal was down $1/t, while bean oil was 2 points lower. The weekly COT report revealed a bean position at -8,600 contracts vs. +30,600 contracts.

Canola

Canola managed to end its 7-day losing streak to finish with small gains. Crush figures from COPA were down week on week, but still quite strong. Weekly exports from Canada were 235,000t, almost 20 per cent higher than the week earlier.

Australia

The Aussie forecast has 10-15mm still penciled in for Western SA, where harvest has already experienced numerous delays. We have some rain in Northern NSW that will add some support to summer crops. Cash markets remain quiet with our currency strength limiting active trade. We are not expecting a huge amount of activity this week ahead of the Christmas period, though it could warrant good flat price ownership (if growers sell) given the potential in CBOT and smaller Aussie crop.

Source: Lachstock Consulting

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