Markets

Daily Market Wire 19 July 2018

Lachstock Consulting, July 19, 2018
Mixed for grains and oilseeds.
  • CBOT wheat was down -3.25c to 494.5c,
  • Kansas wheat down -3c to 487.75c,
  • Corn up 1c to 347.25c,
  • Soybean up 2.75c to 842.25c
  • Winnipeg canola up 3.60$C to 491.9$C, and
  • Matif canola up 0.25€ to 360.5€.
  • The Dow Jones up 79.40 to 25199.29,
  • Crude Oil up 0.159c to $US68.92 per barrel,
  • AUD up to 0.739c,
  • CAD up to 1.317c, (AUDCAD 0.974) and the
  • EUR down to 1.164c (AUDEUR 0.635).

Wheat

Wheat finished fractions lower and US10c/bu off the daily highs, failing to break technical resistance.

Implied volatility in Sep Soft Red Winter wheat finished at 29.75pc.

The market opened with strength thanks to more news of production declines in Europe, as well as quality concerns in the Black Sea brought on by in-crop rains.  This could not be sustained though with front end contracts feeling the pinch.

Matif wheat futures were down €1/t to €186/t, while fob (free on board) premiums in Europe were higher on limited grower selling ahead of an upcoming Algerian tender.

Russian wheat was stable, with large carry costs increasing fob premiums in the time period when Australia will be most competitive.

Corn

Corn finished stronger in a low-range, quiet session.

There was limited fresh news today with the market paused, seeking direction in terms of a weather story or demand story that did not pop up today.

Corn has found support over the last three sessions as sellers rethink their 180 bu/ac US yield ideas, but the weather is not presenting any issues for now and even yields slightly below 180 are above trend and will need to encourage further export demand to prevent US supply increases.

Soybeans

Beans finished fractions higher in a quiet session that marked their third consecutive higher close.

The trade tensions are ongoing, but the market has factored them in for now and is focusing on upcoming mid-term elections as a potential resolution point.

Pakistan purchased 199,000t of new crop beans, which is a reassuring indicator that non-traditional demand will step up despite the absence of the US’s biggest importer.

US weather is still not threatening for yield development at this stage.

Meal was down US$1.10/t, while soy oil was up 34 points.

Canola

Canola finished mixed with Winnipeg futures gaining strength from strong vegoil markets, while European futures finished just fractions higher.

European markets are at somewhat of a tipping point as far as production is concerned, and further revisions from here would encourage greater import demand and could see this spread widen further.

Australia

Aussie markets continue to strengthen in new crop with east coast wheat and barley leading the charge.

The weather forecast continues to disappoint in NSW, SA and QLD.

The lack of grower selling is enabling short players to jack up their price given the thin liquidity and desire by consumers for further coverage.

Source: Lachstock Consulting

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