Mixed for grains and oilseeds.
- CBOT wheat was up 18.25c to 560.5c,
- Kansas wheat up 17.5c to 565c,
- corn down -1c to 364.25c,
- soybeans down -4c to 881.5c,
- Winnipeg canola up 0.5$C to 510.9$C,
- Matif canola up 0.75€ to 383.75€.
- The Dow Jones up 131.35 to 25690.08,
- Crude Oil up 0.40c to $US65.86 per barrel,
- AUD up to 0.731c,
- CAD down to 1.305c, (AUDCAD 0.955)
- EUR up to 1.144c (AUDEUR 0.639).
Wheat erupted early Friday as news circulated of a meeting between the Russian AG Ministry and exporters. Implied volatility in Sep Soft Red Winter wheat finished at 30.87pc. The key discussion topic of the Russian meeting was export volumes, as local meat and milling consumers raised concerns for export volumes over 30 million tonnes (Mt) (USDA 35Mt), no restriction was made, but it’s becoming more and more likely that some kind of intervention will be enforced. If this occurs then we have unbridled rallying potential given the short exportable supplies in other parts of the world. US exports will need to increase significantly and its likely they can wait for the price to come to them, rather than decline locally to tighten the spread. Matif wheat finished up €4.5/t at €211.5/t while Russian values were US$4-6/t higher. The Commitment of Traders Report (COT) came in at SRW +14,200 from 11,000 contracts, KC +39,500 from 34,600 contracts, spring wheat long 2,500 from a square position.
Corn finished fractions lower without a major story of its own. The looming harvest and uncertainty on yield is keeping bullish enthusiasm tempered for now, but once we have greater confirmation on US yields then corn can start to trade the demand that it will inevitably find thanks to the tight global balance sheet. Profarmer crop tour this week should provide more evidence of where the final bean yield will arrive. The COT came in -47,300 from -41,900 contracts.
Soybean finished fractions lower in consolidatory trade, showing great strength towards the end of their session, to break significantly higher of lows, as reports that the US and Chinese leaders were meeting in November in an attempt to resolve their current trade issues. There will be significant pressure on Chinese bean supplies then as Brazilian stocks will be depleted. So we would expect them to take necessary measures to secure a better deal. The COT had beans short -103,900 contracts from -94,500. Soymeal was down $4.50/t and soy oil was up 8 points.
Canola finished fractions higher in both contracts in a boring session which saw the lack of its own story force it to follow of beans and vegoils.
Aussie markets were quiet but stronger on Friday in low volume with the lower CBOT and an exhausted consumer base. There are no major new inputs for now, the crop is shrinking in NSW and we need the WA crop to make up the shortfall. The WA crop is also being watched keenly by Asian consumers whose dependence on cheaper Russian supplies is becoming more and more uncertain. The 8-day forecast has 10-20 mm forecast for Northern NSW, but that is unlikely to provide a tangible benefit to winter crops and would merely provide some moisture to plant a sorghum crop into. What’s of more concern and likely to see price reactions this week is the limited moisture in Victoria and South Australia. If we experience decent production shortfalls here then a 14-15Mt Aussie wheat crop is not out of the question.
Source: Lachstock Consulting