Markets

Daily market wire 20 July 2017

Lachstock Consulting, July 20, 2017

Futures markets closes:

Mixed for grains and oilseeds.

 

  • CBOT Wheat down -3.5cCBOT Wheat down 0c to 526.75c,
  • Kansas wheat down -2.5c to 526.75c,
  • Corn up 5.5c to 396.25c,
  • Soybean up 10.25c to 1004c,
  • Winnipeg Canola down -2.80$C to 511.9$C, and
  • Matif canola down -0.75€ to 367.5€.
  • The Dow Jones up 46.529 to 21621.26,
  • Crude Oil up 0.70c to 47.1c,
  • AUD up to 0.795c,
  • CAD down to 1.259c, (AUDCAD 1.001)
  • EUR down to 1.151c (AUDEUR 0.690).

 

Soybeans

Soybeans were the best performer today, supported by hot temperatures in the longer-term forecast. Nothing telling in the chart, appears that thing will chop around at these levels until weather tell the market which way to break. The large variance in US forecasting models is making it difficult for the market to make this call.

 

Canola

Canola lower despite a weaker dollar, as patchy showers in parts of the Prairies abate weather concerns. There is a lot left to play out here, but for now the sentiment is negative.

Corn

Corn rallied above the 400 levels in Dec but couldn’t close there. The fund long will be looking to support their position, but the choppy weather forecast is keeping everyone guessing. With yield risk premiums already priced in, a lack of export demand and a comfortable global balance sheet, we need to see yield destroying weather, or a significant left field demand catalyst to keep a bid behind things.

Wheat

Winter wheats lower to unchanged after following corn and beans higher early in the session. HRW is under pressure from liquidation after larger a surprisingly long fund position revealed in the latest COT data. Spring wheat was 4 cents lower as rainfall moves into the Dakota, albeit too late to help yields. SRW is at a key technical level, where a lower close would break support and suggest a push to new lows, though the longs will fight hard to prevent this. The fact that funds are long is due to concerns for the major 8 wheat exporters balance sheets. Australia and Canada are next in line, so their production potential should have a greater influence on CBOT moving forward.

Australia

Australian weather forecast is offering nothing new for the next 8 days, which raises some serious concerns for parts of NSW that need a drink before the end of the month. The Australian dollar has rocketed up 200 points in the last two sessions, which is affecting local basis, though the cash prices are still fairly impressive in light of the currency move. This makes the challenge of defining new crop pricing harder, as growers are already reluctant sellers, so a lower cash price will further reduce liquidity. It’s a good market to be selling new crop basis in, if you have the gumption to back Australia in for a good finish.

Source: Lachstock Consulting

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