Daily market wire 23 Jan 2017

Lachstock Consulting January 23, 2017

lackstock1Up for grains, mixed for oilseeds.

CBOT Wheat was up 4.75c to 428.25c, Kansas wheat up 0.75c to 443c, corn up 3.5c to 369.75c, soybeans down -2.75c to 1067.5c, Winnipeg canola up 1.20$C to 519.6$C, and Matif canola up 4.25€ to 425€. The Dow Jones up 94.849 to 19827.25 , Crude Oil up 1.12c to 53.24c, AUD up to 0.755c, CAD up to 1.332c, (AUDCAD 1.006) and the was EUR up to 1.070c (AUDEUR 0.7056).

Soybeans closed slightly lower as profit taking increased offer side pressure. The Argentinian production cuts are still being digested by the market, which has shifted its focus to demand potential and the production potential of Argy soybeans in the good areas not affected by floods. From a demand perspective, the reduction in nearby requirements from China is expected to reduce liquidity as they wind down for the Lunar New Year. The Commitment of traders had the bean spec position increase by 37.9 k contracts to be long 119.9k.

Canola continues to show strength, despite weaker soy oil prices.

Corn closed higher with bid side pressure from new fund buying, despite a heavy balance sheet and decreases in ethanol margins. Export sales were good, which added to bid side support. Corn has traded through important technical resistance levels which will be interesting to see if it can sustain, given the lack of major fundamental inputs.

Wheat export sales were below market expectations. Minneapolis futures were weaker, whilst CBOT and Kansas strengthened. Increased strength in the SRW cash markets were thought to be the catalysts for today’s rally. The wheat spec position increased their short by 5.6k contracts to -98.4k. GASC tender results saw reasonable price increases in Russian and Romanian wheat pricing which supported CBOT from a relative value perspective.

No fresh news in Australia for the moment, in addition to record crops and execution issues, the market is looking to the sorghum crop and whether hot conditions in Queensland have caused any damage to planted acres. Some penciling in a reduction in acres in favor of mung beans, in the absence of more rainfall in the cropping areas.

Source: Lachstock Consulting


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