Overnight futures markets:
- CBOT wheat up 3c to 425.75c,
- Kansas wheat up 1c to 428.5c,
- Corn down 0.5c to 352c,
- Soybeans up 7.25c to 995.75c,
- Winnipeg canola down C$1.80 to $501,
- Matif canola down €0.75 to €344.75,
- Dow Jones up 84.69 to 26156.42,
- Crude oil up 12c to $US63.49 per barrel,
- AUD up to 0.801c,
- CAD down to 1.245c (AUDCAD 0.998),
- EUR up to 1.225c (AUDEUR 0.653).
Wheat closed stronger, with speculative short covering coming in on the back of dryness concerns in the southern plains. Soft Red Winter (SRW) wheat finished off its highs after testing the 20-day moving average, but failed to break through. Matif futures were up €0.75, while Russian fob values were US$193-195 per tonne. Southern Russia has experienced heavy snowfall that has negated any winterkill potential there. Implied volatility in Mar SRW went out at 15.48 per cent.
Corn closed fractions lower in a quiet session which lacked any major fundamental inputs. Funds were noted buyers of soybeans and sellers of corn, which could be dangerous, given the two weeks of dry weather in southern Argentina. For the moment, corn has no major drivers, other than new-crop weather and structure.
Soybeans finished stronger, led by meal and short covering, thanks to an ongoing dry forecast in Argentina. Thanks to decent moisture forecast for this weekend, concerns in northern Brazil have eased. Meal futures were $7 per tonne higher, while oil was down 12 points.
Canola finished lower, but still managed to hold some of yesterday’s gains, and most importantly finish above the $500 resistance level in May. It looks as though canola could not follow the strength in beans, which was supported by short covering and the weaker vegetable oil situation.
Aussie markets were dead quiet yesterday and, with the dollar over US80 cents, are not expected to do anything too exciting today. Northern markets continue to show strength, with barley trading over wheat for delivery on to southern Queensland’s Darling Downs, while sorghum has increased around $5 on a shortage of grower selling.
Source: Lachstock Consulting