Markets

Daily market wire 19 October 2017

Lachstock Consulting, October 19, 2017

Overnight markets:

Lower for grains and oilseeds.

  • CBOT wheat was down -4.75c to 430c,
  • Kansas wheat down -5.25c to 428c,
  • corn down -1.5c to 348.5c,
  • Soybean down -0.25c to 995c,
  • Winnipeg Canola down -0.5$C to 505.6$C,
  • Matif canola down 0€ to 365.75€.
  • The Dow Jones up 160.16 to 23157.6,
  • Crude Oil up 0.159c to US$52.04,
  • AUD up to 0.784c,
  • CAD down to 1.246c, (AUDCAD 0.977)
  • EUR up to 1.179c (AUDEUR 0.665).

Wheat

Wheat ground lower in quiet trade, leaving it sitting only US10 cents/bushel off the seasonal lows formed at the end of August. Implied volatility in Dec Soft Red Winter wheat futures went out at 16.75 per cent. Russian prices were slightly higher in the nearby, despite missing the Algerian tender to French or Argy wheat. Egypt’s GASC were also in after the close tendering for first half Dec shipment. It’s hard to see a significant catalyst to get us US20 cents/bushel either side at this stage. Funds continue to sell volatility, while carry structures in US wheat markets prevent softening in nearby basis. New crop acres will be the likely bullish catalyst and there’s already plenty of chatter about 5-10pc reductions in Hard Red Winter wheat acres.

Corn

Corn off slightly, now sitting US6 cents/bushel off seasonal lows. Harvest progress is picking up pace with dry weather is supporting good harvest access. This is putting some weight on cash prices. Corn has been propped up recently by new crop South American production concerns, however recent rains and an improved forecast for Brazil have abated these worries. The demand profile is slow at present with ample supplies globally to compete.

Soybeans

Soybeans just below unchanged, in a quiet session with a US7 cents/bushel range. The market is waiting for the outcome of South American weather forecasts before it decides to push to new technical resistance, or completely fall out of bed. Nearby meal was up a fraction, while oil was off US18 cents/lb. Its no secret that Chinese demand has been delayed due to higher vegoil supplies this year. It has been confirmed by their National Grains and Oil Info Center, which announced soybean oil stocks at 1.6 million tonnes, 300,000t above last year’s stock level.

Canola

Canola followed beans in a very quiet trade that featured a Can$3.4/t range. It is in a similar technical picture to beans with different drivers. Chinese demand could ignite a bid and push through resistance to forge new highs, and a lack of it could see things fall in a heap.

Australia

The Aussie forecast is similar to yesterday’s, with 15-25mm forecast for most of NSW and QLD. Hearing some early reports of sprouted winter wheat in parts of Southern QLD that couldn’t get their grain off before the rains. This should see an expansion in protein spreads. Cash markets were slightly lower, with volumes still limited by lack of grower selling.

Source: Lachstock Consulting

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