Grain and oilseed futures settled mixed.
- Chicago wheat December contract up 3.5 cents per bushel to 515.5c;
- Kansas wheat December contract up 0.25c to 426c;
- Minneapolis wheat December contract down 2c to 501.25c;
- MATIF wheat December contract down €0.25 to €180 per tonne;
- Corn December contract down 3.25c to 366.75c;
- Soybeans January contract down 6.5c to 905c;
- Winnipeg canola January contract up C$1.30 to C$466.50 per tonne;
- MATIF rapeseed February contract down €0.25 at €391.75/t;
- Brent crude January contract up US$1.49 to $62.40 per barrel;
- Dow Jones index down 112.93 to 27821.09 points;
- AUD stronger at $0.6898;
- CAD weaker at $1.3307;
- EUR weaker at $1.1076.
In market news overnight;
- Wheat posts 3 up sessions in a row
- US Senate passes legislation to support Hong Kong protesters
- Option market indicates balance sheets are comfortable
- Southern Australia swelters with little to no harvest taking place
Wheat did it – 3 up sessions in a row!
Makes the technicals a dog’s breakfast post the rejection of the highs.
If the market can rally through the previous high it would spark another round of short covering and, from a technical perspective at least, signal a buy.
Interesting that wheat could trade independently to the row crops today. They suffered under the next chapter of the Trump/China soap opera.
The US senate passed legislation supporting the Hong Kong protestors – not ideal timing when trying to negotiate a trade agreement with China.
Trump has a few fires burning at the moment – just when it looked like the impeachment inquiry was going to end up being a total farce Gordon Sondland, the US ambassador to the EU, dropped Trump back in the mire.
Our only focus is how this will distract the Trump administration from the pressing issue of getting phase 1 of the trade deal with China executed.
The “what-ifs” at the moment are massive;
Corn and bean yield still have exposure to review,
China bean demand post the worst of the African swine fever is an unknown, and
global wheat production into northern hemisphere new crop is a huge unknown.
Assessing risk premium is a difficult but is the function of the options market.
And, according to the volume markets there is nothing to see here. The long holder of option premium has not been rewarded over the last few years and it seems they have thrown the towel in.
The growth and performance in investor products that stay short volatility are a clear indication that, despite the odd hiccup here and there, global ag markets have been reasonably well supplied.
Australia
Locally South Australia endured the hot windy conditions yesterday as expected, a handful of fires broke out across the state and one fire on the Yorke Peninsula still remains uncontained.
Victoria is set for similar conditions today which will pull growers up for the day, good opportunity for the grower to look at some marketing while off the header.
Lower grades on wheat firmed a fraction on the grower cash boards throughout the day.
Sorghum markets in the North continued to strengthen.
Canola through Port Kembla and Geelong/Melbourne port zones firmed by $1-2/t on the grower boards.
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