Daily market wire 22 March 2017

Overview of currency and futures markets:

Lower for grains, mixed for oilseeds.

CBOT Wheat May contract was down -4.25 at 426c,
Kansas wheat down -7.25c to 438c,
corn down -2.25c to 361.25c,
soybeans up 1.25c to 1000.75c,
Winnipeg canola down -0.5$C to 504.9$C,
Matif canola unchanged at 407.75€.
The Dow Jones down -237.85 to 20668.01,
Crude Oil down to 48.12c,
AUD down to 0.768c,
CAD up to 1.335c, (AUDCAD 1.026)
EUR up to 1.08c (AUDEUR 0.711).

Wheat

Wheat was the leader again today, suffering the biggest sell off. Improved weather forecast for US winter wheat regions was the catalyst, seeing a heavy sell off, before the market bounced off the daily lows in a minor show of strength. Interesting that the forecast is leading the market, when current conditions are unfavorably hot and dry. The rumors of Turkey banning Russian imports continue, market chatter that they still have 500-800,000t old crop to buy, without Russian they have to depend on Baltic whom have low supplies, or Hard Red Winter (HRW) wheat. The result for HRW would be positive – Kansas wheat futures – if it eventuated. December Soft Red Winter (SRW) wheat – reflected in CBOT wheat futures – is now 25 cents off its January lows, with a spec short in triple figures and a lot of production to get through.

Soybeans

Soybeans were under pressure early, but recovered to close above $10.00 as support was uncovered below these levels. The market looking to new crop acres, South American production and demand signals. Chinese prices were under pressure overnight, dropping 17c.

Canola

Canola was fairly flat, it did not follow higher soy oil, which is rallying on speculation of a US tax on Argentine biofuel imports.

Corn

Corn pushed lower by technical selling and weakness in wheat and crude oil prices. Chinese corn is again rumored to be moving into Japan, while China is rumored to be importing US corn from the Pacific North West (PNW), in what appears to be an elaborate game of pass the parcel. US corn prices still remain competitive into destination markets, so export sales should be supportive. Grower selling is non-existent on the break in futures, so US basis is rallying.

Australia

Recent rainfall in Australia is seeing improved new crop sentiment, while the forecast remains positive for Qld and NSW. The barley market is still trying to make sense of the Saudi results, it seems as though the big seller with no Aussie origination will have to depend on the fob market, which is not always kind, particularly with Chinese interest working quietly in the background.

Source: Lachstock Consulting

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