Markets

Daily market wire 21 June 2017

Lachstock Consulting, June 21, 2017

Overnight markets:

Mixed for grains and lower for oilseeds.

  • CBOT Wheat up 4.75c to 487.75c
  • Kansas wheat up 1.5c to 492.25c
  • Corn down -5.25c to 378c
  • Soybean down -10.25c to 931.5c
  • Winnipeg Canola down -6.30$C to 483.4$C
  • Matif canola down -6€ to 360.25€
  • Dow Jones down -61.85 to 21467.14
  • Crude Oil down -0.970c to 43.23c
  • AUD down to 0.757c
  • CAD up to 1.326c (AUDCAD 1.005)
  • EUR down to 1.113c (AUDEUR 0.680).

Soybeans

Soybeans were an afterthought today, with most of the action still occurring in beans and corn. The same forecasts, which are easing corn concerns, are making the outlook better for beans. With the huge production in South America and increased acres in the US, the only thing that beans have going for them are the record short position. Though this appears to be reasonably safe for now with conditions improving week on week at 67% good to excellent vs. 66.

Canola

Canola lower following weakness in beans, combined with and a more optimistic outlook for new crop production. Prairie conditions have improved recently alleviating concerns about prevent planted. A stronger CAD also weighed in on things.

Corn

Corn lower as forecast reveals a less damaging outlook then what was being priced last week. With the heavy global balance sheet and with the structural support out of the market, there is not much to keep corn higher. Corn conditions came in unchanged week on week at 67% good to excellent.

Wheat

Wheat caught a bid earlier in the session lead by spring wheat, which rallied almost 17 cents. Crop conditions were reported after yesterday’s close, revealing a worst than expected result. Conditions came in 4% lower for spring wheat at 41% good to excellent and 1% lower in winter wheat at 49% good to excellent. Implied vol went out in July SRW at 32% ahead of options expiration on Friday. Other factors keeping a bid behind the wheat market were European weather, with the hot dry forecast for Western Europe now shifting into parts of South West Russia which will not do any damage, but if it continues into the Volga valley then we should see yield reductions. CBOT wheat saw some pressure from the Ruble, which reached its lowest rate of the year today. This should increase Fob market liquidity out of Russia as grower selling increases. As the protein story unfolds in wheat, there has been a lot of trade noted in the Baltic where relatively cheap protein cargoes are available. This protein story is not going away in a hurry.

Australia

The 7 days forecast for Australia is similar to yesterday’s with a little more substance behind it. The WA rainfall is still expected to miss the central and northern areas in the most need, though the Southern forecast could extend through to SA where conditions are getting worst every day. Cash markets very strong in Wheat and Barley, with new crop dryness concerns and a shift in global sentiment helping markets forget that we just grew record crops.

Source: Lachstock Consulting

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