Markets

Daily market wire 2 June 2017

Lachstock Consulting, June 2, 2017

Lower for grains and oilseeds.

  • CBOT Wheat down -0.25c to 443.5c
  • Kansas wheat down -0.75c to 449.25c
  • Corn down -1.5c to 378.5c
  • Soybean down -3c to 915.25c
  • Winnipeg Canola down -3.30$C to 478.8$C
  • Matif canola unchanged at 352.75€
  • The Dow Jones up 135.529 to 21144.18
  • Crude Oil down -0.289c to 48.03c
  • AUD down to 0.737c
  • CAD up to 1.351c (AUDCAD 0.996)
  • EUR down to 1.121c (AUDEUR 0.657).

Soybeans

Soybeans slightly lower in a fairly limited session, the fund position is building in soybeans and the technical picture is looking oversold. However we cannot ignore the stock burden and slow demand we are currently witnessing.

Canola

Canola keeps getting bashed around by a crumbling inverse. July futures were $6.10 lower, meaning that the inverse has lost $11.2 in 4 sessions. Limited consumptive demand and an overbought situation has seen speculators heading for the door at the same time. Concerns continue to mount for planting delays in parts of the prairies with talk of further production revisions going forward.

Corn

Corn couldn’t close higher as the market favoured wheat length in favour of other commodities. There is really no news in corn at the moment, the weather/planting scare appears to be subsiding and the stock position is big enough to contract futures ranges as we have witnessed. A large unforeseen catalyst is required to get a rocket under corn.

Wheat

Spring wheat was the leader again today, managing to close lower, with both winter wheat classes just under unchanged. Winter wheat is experiencing hedge pressure as harvest liquidity/production certainty starts to weigh in on things. A pressure ridge forming over spring wheat areas is creating concerns for yield and protein content in Minni. The 10-14 day forecast is wetter long term, but dubious this far out. HRW harvest in Texas and Oklahoma is the focus at present with the potential for quality and yield upside as things progress. SRW lacking any fundamental story for the foreseeable future. Russian wheat has a US$15 inverse between old and new crop, hard to justify this sustaining itself in the next two months. Weather-wise revisions continue for European crop due to dry conditions in France, Spain and the UK, while the forecast remains hot and dry for Ukraine and southwest Russia.

Barley

Barley acres in Europe are being revised down with Cocereal changing their forecast from 57.2 mmt from 59.6 mmt. As per our global barley SnD, this balance sheet is already reasonably tight, so a reduction of this size should impact price action as we progress.

Australia

Aussie forecast remains dry as a chip. WA, Western SA and parts of Western NSW need rain in the next 3 weeks before yield and acres reduce. For WA and SA we will revise Canola acres 5% lower in favour of barley given the conditions to date. Nothing new from a price action point of view, wheat is unloved and barley is well supported. The AUD broke .74 which could encourage bids today, though it’s hard to foresee the trade doing much at the beginning of the month and end of the week.

Source: Lachstock Consulting

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