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Daily Market Wire 19 June 2018

by Lachstock Consulting, 19 June 2018

Lower for grains, mixed for oilseeds.

  • CBOT wheat down -9.5c to 490c,
  • Kansas wheat down -20.25c to 499.5c,
  • corn down -5.25c to 356c,
  • soybeans up 3c to 908.5c,
  • Winnipeg canola was unchanged at 520$C,
  • Matif canola down -0.75€ to 348.75€.
  • The Dow Jones down -103.00 to 24987.47,
  • Crude Oil up 0.76c to $US65.83 per barrel,
  • AUD down to 0.742c,
  • CAD down to 1.319c, (AUDCAD 0.979)
  • EUR up to 1.162c (AUDEUR 0.638).

Wheat

Wheat suffered further selling, led by Hard Red Winter (HRW) wheat which is enduring some harvest pressure.

Implied volatility in Sep Soft Red Winter (SRW) wheat futures went out at 27.5per cent (pc).

Good early harvest results in southern Russia’s best areas are skewing market perceptions of production potential.

Canada’s premium wheat exports are in trouble for the moment as Japan and South Korea suspended imports due to the detection of GMO wheat in an Alberta crop.

Corn

Corn continues to bleed as North American Free Trade Agreement (NAFTA) worries and China trade concerns raise questions over the future demand profile.

On top of this US crop conditions continue to be ideal and, while we know this is too early to call, it is the current justification for price action.

The global balance sheet is expected to reach 5-year lows from a carryout point of view, so there is a lot riding on US yield. US growers have shut up shop from a selling point of view, so some risk premium should re-enter this market once momentum sellers get out of the way.

The crop conditions report released after the market close showed the corn crop rated 78pc good to excellent versus 77pc last week and 77pc last year. Emergence was 98pc from 94pc last week.

Soybeans

The bleeding finally stopped for front end soybean contracts, rallying off new seasonal lows to manage a stronger finish. There was thought to be a large unwinding effort of short beans/long wheat and corn in today’s session, which is explained by the price action.

All of the same political issues are present, with no resolution in sight.

Soymeal was down US$3.40/t, while soy oil was up 7 points.

The weekly crop conditions report put bean planting at 97pc, up 4pc on last week and up 6pc on the five-year average. Emergence is also strong at 90pc vs an average of 8pc.

Canola

Canola finished unchanged to lower nearby contracts, in a mild session that followed price action in beans.

The Canadian dollar attempted a turnaround which was quickly quashed leaving the market there unchanged.

Australia

Aussie market was flat to slightly higher yesterday, thanks to limited moisture potential on the 8-day forecast. The lower dollar continues to help flat price and consumer buying remains as NSW production estimates continue to decline.

Source: Lachstock Consulting

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