Overnight markets:

Mixed for grains and oilseeds.

• CBOT wheat up +1.75c to 467c,
• Kansas wheat down -1c to 472.5c,
• Corn down -8.75c to 375.25c,
• Soybeans down -1.25c to 937.75c,
• Winnipeg canola up +3.19$C to 517.3$C,
• Matif canola up +3.5€ to 366.25€
• Dow Jones up +144.71 to 21528.99,
• Crude Oil down -0.60c to 44.14c,
• AUD down 0.759c,
• CAD up 1.321c (AUDCAD 1.003),
• EUR down 1.114c (AUDEUR 0.681).

Wheat

Wheat traded a punchy range to close slightly lower in each class. This was fairly impressive, considering the weakness in corn markets and the Hard Red Winter (HRW) harvest pace, which should see some selling pressure reach the market. Quality reports of HRW harvest continue to report lower-than-expected protein, which could be the cause of limited selling, as farmers hold it for a blend. Global influences are keeping things supported with dryness in Europe, Ukraine and Australia discouraging any major selling. MATIF futures traded their highest close since July last year, as a hot Western European forecast threatens yields, which are already declining.

Corn

Corn was the poor performer today, weighing heavy on beans and wheat. The considerable turnaround in the Commitment of Traders position was finally digested and prices fell upon the realisation that no structural support leaves corn back trading a heavy balance sheet. Weekly export inspections were above expectations and well over what is required to meet the USDA export forecast.

Soybeans

Soybeans defied today’s weakness in corn and managed to hang on to recent gains. Dryness in the Dakotas is raising concerns for yield reduction which, given the size of the spec short in soybeans, is enough to keep things from falling too far. In addition to this, there were reports of fresh Chinese inquiry, which would provide welcome support if realised.

Canola

Canola came out of the blocks, trading up almost $5 in the July before settling a few dollars off the highs. The November contract performed similarly, but with a lower range; this has left the July/Nov inverse back near its April highs. With settlement so close, we expect there could be more to play out on this one.

Australia

The Australia forecast is not too different from yesterday; the rain off WA looks to be building in a bit more moisture, though it’s not set to fall in the right place. This forecast brings with it some limited moisture for SA, though it’s towards the end of the 8-day forecast, and under 10mm. Cash markets remain strong, with wheat basis strong on the recent rally, posting seasonal highs for APW values; while the forecast for Australia remains dry, we cannot see this softening.

Source: Lachstock Consulting