Daily market wire 18 September 2017

Overnight markets:

Higher for grains, mixed for oilseeds.

CBOT wheat was up 6c to 449c,
Kansas wheat up 4c to 446c,
corn up 0.5c to 354.75c,
Soybean down -7c to 979c,
Winnipeg Canola up 0.699$C to 495.7$C,
Matif canola down -0.75€ to 367.5€.
The Dow Jones up 64.86 to 22268.34,
Crude Oil down -US6c to 49.83US$,
AUD down to 0.799c,
CAD up to 1.218c, (AUDCAD 0.974)
EUR down to 1.192c (AUDEUR 0.670).

Wheat

Winter wheats were stronger, while Minneapolis dropped US11 cents/bushel. Soft Red Winter (SRW) wheat futures posted its strongest monthly close, briefly breaking the 450 level, before closing just below. Implied volatility in Dec SRW went out at 20.5 per cent. The weekly Committment of Traders (COT) report for SRW was -99,800 contract vs. – 104,600, Hard Red Winter COT was +7,900 contracts vs. +10,600 and spring wheat was +4,300 vs. +4,800 contracts. Cash prices continued to rally in Russia, despite the perceived harvest pressure. The Russian Agriculture Ministry said 75.7 million tonnes (Mt) of wheat had been harvested. Russian wheat prices are all about logistics ownership; FOB premiums should not fall too much, rather interior prices will come off given the limited supply of export capacity relative to crop size. Agribusiness intelligence provider, Informa, were out with a new crop wheat acreage forecast, slightly above this year’s, which seems strange given the current economic indicators.

Corn

Corn finished slightly higher gaining some support from wheat, which prevented it following beans lower. Corn still has no story of its own, although the COT short is getting on the heavy side of things, -145,700 vs. -140,200 contracts last week.

Soybeans

Beans could not hold their strength despite impressive crush figures and new export sales to China. Mild concerns continue for new season South American production where it is thought to be too dry in Brazil and too wet in Argentina. Meal was down $1.50 per tonne and oil was down 27 points. The COT came in at -43,900 vs. -49,900 contracts. Beans keep running into technical resistance around 985 c/bu in the Jan contract and will need to break through this soon if they are to maintain their momentum.

Canola

Canola harvest in Canada is coming off at a record pace and faces the challenge of limited nearby export demand. So far in this crop year Canada’s canola exports are well below the three-year average. The CAD is still maintaining its strength, however domestic crush is increasing despite the higher dollar.

Australia

The 8-day forecast features 15-25mm for the majority of WA’s production regions, though the rest of the country remains dry. In particular NSW and QLD, which are in desperate need of moisture. More frost events were present in Southern and Northern NSW over the weekend, which is a big concern, considering that things are already going backwards there. Cash markets should open with strength today in response to this, as traders will be forced to consider lower production figures.

Source: Lachstock Consulting

Markets