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Daily Market Wire 20 September 2018

by Lachstock Consulting, 20 September 2018

Higher for grains and mixed for oilseeds..

  • CBOT wheat was up 12c to 522.5c,
  • Kansas wheat up 10.25c to 526.25c,
  • corn up 2.5c to 345.75c,
  • soybeans up 16c to 830c,
  • Winnipeg canola up 0.60$C to 487$C, and
  • Matif canola down -2€ to 363.75€.
  • The Dow Jones up 158.79 to 26405.76,
  • Crude Oil up 0.25c to $US71.37 per barrel,
  • AUD down to 0.726c,
  • CAD down to 1.292c, (AUDCAD 0.938) and the
  • EUR down to 1.167c (AUDEUR 0.621).

Wheat

Wheat led things higher as the sum of global problems prompted a bid. Matif wheat was up €3.25/t to €202.5/t. Implied volatility in Dec Soft Red Winter wheat futures finished at 24.5pc. The USDA has a 10-15 million tonnes (Mt) export hole to plug over their next few WASDE reports with export declines in Australia and potential for a 5Mt drop in Australian and 3Mt in Europe. Perhaps Canada can fill part of the void, Canadian statistical reporting agency Statscan’s all wheat production figures increased from 29Mt to 31Mt. Australian production woes are front and centre for global wheat, as is limited moisture for Russian winter wheat plantings. The spring wheat crop harvest there is not complete and will need a run of dry weather to enable this. Middle Eastern demand for wheat has continued with more destinations stepping in for cover.

Corn

Corn finished fractions higher as short-term technical support and cheap relative US values prompted some short covering. Weekly ethanol figures contradicted reports earlier in the week of declining margins, with production increasing 3pc from the week prior. Corn needs demand to stop bleeding lower, weekly export sales are expected at 850,000t, but need to be higher (893,000t) to meet the USDA’s forecast.

Soybeans

Profit-taking in beans prompted a pop as shorts reduced risk on technical support and anticipated Argentinian import demand that should reduce US ending stocks. Yesterday’s new contract lows saw beans reach their lowest value in 10 years, which told some shorts that enough was enough. The trade chatter and mud-slinging continued, China is adamant that they do not need US beans and are said to be adjusting their rations accordingly, while also buying Argentine beans. US beans are going from the US to Argentina, so Argentine beans can go to China. Soymeal was up US$5.90 /t and soy oil was up 13 points.

Canola

Canola finished mixed across the two contracts. Winnipeg futures held up well choosing to following strength in veg oils rather than focus on higher currency and production. Canadian statistical reporting agency Statscan’ satellite production model suggested canola production at 21Mt, which was a noted increase from their last survey figures a fortnight ago. European futures softened with Ukrainian production increasing.

Australia

Aussie market strength continued yesterday with no respite from the weather forecast and increasing concerns in both grower and consumer land. Unfortunately, there is not much more to say on Australia, the east coast is getting worst and our reliance on WA is getting magnified. Let’s hope they can get through the rest of the frost window unscathed.

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