Daily market wire 20 March 2017

Overview of currency and futures markets:

Prices were mixed for grain and oilseeds in a stagnant session.

CBOT Wheat May contract was up .5c at 436.5c,
Kansas wheat up 4.25c to 453.5c,
corn up 1.5c to 367.5c,
soybeans down 1.5c to 1000.0c,
Winnipeg canola down -2.01$C to 503.7$C,
Matif canola up 0.5€ to 407.5€.
The Dow Jones down -19.93 to 20914.62,
Crude Oil down -.08c to 48.69c,
AUD up to 0.797c,
CAD up to 1.3344c, (AUDCAD 1.0273)
EUR up to 1.0736c (AUDEUR 0.7169).

Wheat

Wheat achieved its lowest volume trade day of the year, with limited fresh inputs for the market to trade. HRW was supported as the forecast for rainfall on the plains has started drifting off. There was chatter that Turkey will ban Russian imports of wheat, which is Russia’s second largest wheat export market, but only rumors at this stage. The commitment of traders report saw a large increase in the wheat short positions from 86.9 to 119k contracts. With the short at these levels, the market only 30 cents off its lows and a lot of new crop weather to contend with, would expect reasonable buying support below current levels.

Soybeans

Soybeans were in the red most of the day and closed slightly lower, in what was a quiet session for most of the oilseed complex with meal and oil only posted slight movements. Beans is on the defensive as bearish sentiment continues to dominate price action, as big crops in South America continue to dominate sentiment. The commitment of traders report confirmed price action with the spec position liquidating their long by 35.9k to 67.7k contracts.

Canola

Canola lower again, despite stronger palm oil pricing, as technical selling dominates.

Corn

Corn was also quiet, closing slightly higher in a stagnant session. It did manage to close above its 100 day moving average in the nearby contract, which adds strength to the technical picture. The Commitment of Traders report had the corn position reverse from 65.4 to -25.4k contracts. Despite the large production in South America, the US markets should be supported at these levels, due to a lack of grower selling, ongoing internal consumption and new crop production volatility.

Australia

The weather forecast for the week looks to provide a good soaking to most of NSW and parts of Victoria, which will assist winter crop planting decisions. Last week saw good rainfall for NNSW and QLD, so far seasonal conditions are not respecting dry three month forecast by the BOM. In spite of this prices remain reasonably strong, as grower liquidity has dried up and traders still need to fill boats.

The Saudi tender announcement on Friday put some fire into the barley market, as traders attempt to front run the price action, or cover existing shorts. The shipment period suggests that Australian should get a good portion of this demand, so will be interesting to see how far prices climb considering the ongoing Chinese import interest.

Source: Lachstock Consulting

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