Futures markets traded mostly higher on Friday, settlements as follows;
- CBOT Wheat May contract was up 9.5c to 462.25
- Kansas wheat May contract up 6.5c to 443c
- Corn May contract up 3c to 373.25c
- Soybeans May contract up 10.75c to 909.25c
- Winnipeg canola May contract was up C$3.60 to C$464.80
- MATIF rapeseed May contract down €1.25/t to €355.50
- Dow Jones up 138.97 points to 25,848.87
- Crude oil April contract down $0.09 to 58.52
- AUD up to 0.7085c,
- CAD down to 1.333,
- EUR up to 1.132.
Weekly commitment of traders report shows big corn short
CFTC positioning out on Friday brought a surprisingly short corn position, with funds short 258k (fut + opt) down some 81k from the week prior and setting new historical records for their net short. Wheat futures were less surprising, with the CBOT lower by 300 contracts and KC shorter by 4400 – all of which will have changed since in the rally.
On a few other global notes, India has reportedly raided the offices of some commodity traders over the weekend, as part of an investigation into alleged price fixing back in 2015 and 2016 – of note that Reuters is claiming the investigation is also intended to look into the potential that this has continued since then. Brazil is adding a potential bright spot to US wheat demand, potentially opening up a 750 kmt annual duty free tariff (they normally import Argentine wheat under Mercosur rules, but have lowered tariffs in the past when Argy wheat was not available and taken US/Canadian wheat).
US-China trade talk and illicit pork
Following last week’s Chinese purchases of US pork, the USDA has discovered and seized some 1 million lbs (450 thousand kg) of Chinese pork that was being smuggled into the US – no word yet if it has been confirmed to be contaminated with swine flu, but concerns are high and they have promised more work to prevent the smuggling (and risk of ASF spreading to the US). Meanwhile, China has promised to abide by newly passed laws to protect foreign firms – promises aimed at placating skepticism that China will follow their previous patterns and break/work around commitments made in trade deals (as they have consistently done with grain TRQs allocated to SEOS and never filled). They have also announced additional attempts to support the economy, with tax cuts and infrastructure spending promised.
Rains were far better than forecast in Southern QLD/N NSW, with falls over 200 mm in spots near Goondi and other spots pushing well over 50-100 mm. Showers also pushed further south than had been forecast, with rains as far south as Nyngan and Coonamble. Unfortunately, coverage was still spotty, and there’s much left to be filled in – but still, a great help to those who got the moisture. The two-week forecasts have improved for some potential follow up – with rains off the cyclone pencilled across Queensland and into N NSW again.
Source: Lachstock Consulting