Markets

Daily market wire 23 November 2017

Lachstock Consulting, November 23, 2017

Overnight futures markets:

Mixed for grains, higher for oilseeds ahead of the Thanksgiving holiday.

  • CBOT wheat was down -2c to 422.75c,
  • Kansas wheat up 0.75c to 421c,
  • corn up 0.25c to 345.25c,
  • Soybean up 8.25c to 1008.5c,
  • Winnipeg Canola up 0.199$C to 523.3$C, and
  • Matif canola up 0.75€ to 376.5€.
  • The Dow Jones down -64.72 to 23526.11,
  • Crude Oil up 1.17c to 58c,
  • AUD up to 0.761c,
  • CAD down to 1.270c, (AUDCAD 0.967) and the
  • EUR was up to 1.182c (AUDEUR 0.644).

Wheat

Wheat futures prices were mixed across the classes, with limited fresh inputs. The market forgot about toxic wheat in Russia, where cash prices remained stable.
US markets focused on the December contract expiry, where a Variable Storage Rate contraction is highly unlikely. Implied volatility in December Soft Red Winter wheat futures went out at 19.25 per cent.
The Tunisia tender results were out with 100,000t trading for Jan/Feb shipment at US$185/t free on board, for 11.5pc protein wheat out of the Black Sea. This undercut the French market by around $4/t.
La Nina concerns are building with Australia’s Bureau of Meteorology confirming a 70pc chance of a La Nina event in February. This suggests a dryer pattern for Brazil, Argentina and the Southern Plains of the US and could spark sentiment shift.

Soybeans

Soybeans caught a bid, lead by a sharp rally in meal, which was spurred on by South American production concerns. Meal was $5.90/t higher, while oil was 7 points lower. Recent rainfall in Argentina appears to have missed a large portion of the cropping region. This combines with the development of the La Nina pattern suggesting a much cooler, dryer production season.

Canola

Canola scratched out a higher close, but settled Can$2.5/t off its highs as a stronger dollar discouraged the bid. The January ICE futures contract is still showing potential to break the $520/t resistance level which should spark a push for $530/t, though the bid is lacking conviction for now and we probably need to see something tangible in the form of export demand to spark this.

Corn

Corn fractions higher in another low range session. 3c/bu was all it could muster, with the ongoing battle of sentiment, with heavy stocks weighing on prices, while new crop production concerns and a short structure feed the bulls. Reality is there is a power of corn to get through and demand is no satisfying that for now.
It needs a new crop issue to move beyond current price levels.

Australia

There is still some rain around in SA, NSW and parts of Victoria. NSW is expecting 50-100 mm in central and northern regions and will impact any un-harvested grains there. It will be fantastic for summer crops and should get sorghum acres well above historic averages.
Cash markets remains quiet as the trade waits for the grower. Wheat and barley prices are quite competitive on the export front, so downside feels limited from here, grower selling or not.

Source: Lachstock Consulting

 

 

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