Overnight markets:

Mixed for grains and lower for oilseeds.

• CBOT Wheat down -4.25c to 475.25c
• Kansas wheat up 0.25c to 485.75c
• Corn down -6c to 370.75c
• Soybean down -14c to 908.5c
• Winnipeg Canola down -6$C to 473.4$C
• Matif canola down -1€ to 357€
• Dow Jones down -12.739 to 21397.29
• Crude Oil up 0.25c to 42.78c
• AUD down to 0.754c
• CAD down to 1.323c, (AUDCAD 0.997)
• EUR down to 1.115c (AUDEUR 0.676)

Soybeans

Soybeans keep falling for the same reasons, a heavy global balance sheet and limited export demand. Weekly export sales were below expectations and significantly below last years new crop pace. This combined with an improving weather forecast and lack of enquiry from China helped push things lower. The technical picture is now looking quite grim with the November contract testing its yearly lows formed back in August last year.

Canola

Canola suffered the same fate as beans in new crop, with the close getting dangerously close to technical support. Conditions in Canada are looking more promising than three weeks ago, with reports that most of the crop is in the ground and in reasonable condition.

Corn

Favourable weather was the driver in corn, with the forecast suggesting good rainfall over the Corn Belt in early July. This week has disproved the bullish story, which was being painted last week, and with the spec position significantly reduced there is nothing to hold it up. Weekly export sales were lower than expected in old crop and significantly behind on new crop, reflecting only 66% of last year’s sales at the same time.

Wheat

Wheat settled higher in Spring wheat and HRW, but couldn’t stay up in SRW. Winter wheat suffered harvest pressure and fund selling that saw things dive early before rallying to settle on the daily highs. The Spring wheat story is alive and well with ongoing concerns for Montana and the Dakotas. HRW quality reports are disappointing, which suggests potential for further widening between SRW and HRW. Global features saw matif futures lower on a cooler forecast in France while the GASC tender for 175 kmt of wheat was priced out of Romania and Ukraine for July.

Australia

The Australian weather forecast is not offering much in the near term. WA received some rainfall (approx. 15mm) in central areas yesterday, though more is required with better coverage, to ease market concerns. While SA has nothing on the forecast there is a lot of rainfall inland and off the coast, which could make its way to key production areas and help ease the pressure on their moisture starved crops. Cash markets remain crazy in wheat and barley, reaching levels beyond export parity suggesting the market is trading a crop much smaller than the record crops achieved this year.

Source: Lachstock Consulting