Markets

Daily market wire 19 July 2017

Lachstock Consulting, July 19, 2017

Futures markets closes:

Mixed for grains, stronger for oilseeds.

 

  • CBOT Wheat down -3.5c to 526.75c,
  • Kansas wheat down -3.5c to 529.25c,
  • Corn up 2.75c to 390.75c,
  • Soybean up 4.5c to 993.75c,
  • Winnipeg Canola up 4.50$C to 514.7$C,
  • Matif canola up 0.25€ to 368.25€.
  • The Dow Jones down -54.99 to 21574.73,
  • Crude Oil up 0.189c to 46.21c,
  • AUD up to 0.792c,
  • CAD down to 1.262c, (AUDCAD 0.999)
  • EUR up to 1.155c (AUDEUR 0.685).

 

Soybeans

Soybean conditions dropped 1%, coming in at 61% good to excellent. Concerns are limited for soybeans at this stage, given that time is on their side. There is a mixed array of concerns, with some areas too wet and some too dry. Extreme sustained heat is required to mount yield concerns at this stage in the game. Export inquiry remains quiet, with Chinese buyers not making any major plays. With structure out of the picture, it is hard to see sustained rallies, without an unforeseen catalyst.

Canola

Canola stronger, ignoring a stronger Canadian dollar to post an impressive close, on the back of ongoing dryness in the Prairies. The technical picture in the Nov contract is showing potential to revisit highs, though prairie weather will be the driver if that occurs. Reports coming in that basis levels are softening in Canada as growers in good production areas commence selling to manage harvest logistics.

Corn

Corn closed higher, but well off the daily highs. Crop ratings declined 1% to 64% good to excellent, which represents the lowest ratings for this period since 2012. At current prices the US crop is uncompetitive vs. South American supplies. Despite the production concerns, order flow is now limited, with a long COT structure and limited export demand. Market consensus appears to be trading a 166 bushel yield in corn, so weather remains the driver for the near term.

Wheat

Spring wheat stronger again, while winter wheats were off the boil again. Sustained hot and dry conditions in the Dakotas continue to put pressure on yields in spring wheat. Conditions were down 1% for spring wheat at 34% good to excellent, with the crop 91% headed. Dec SRW is at a critical point from a technical point of view, where a close below support at 519, could see a quick push towards the bottom of the range given the market structure. Any rally will be attributed to corn weather or Aussie/Canadian production revisions, which time will tell.

Australia

Nothing exciting in the Aussie forecast with patchy showers in WA and Vic, while SA and NSW are ignored. The NSW situation is becoming concerning given its potential to receive nothing before the end of July. Basis is acting accordingly as yield revisions are peeled back.

Source: Lachstock Consulting

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