Markets

Daily market wire 23 October 2017

Lachstock Consulting, October 23, 2017

Overnight markets:

Lower for grains, mixed for oilseeds.

  • CBOT wheat was down -6.75c to 426c,
  • Kansas wheat down -6.5c to 422.75c,
  • corn down -4.5c to 344.5c,
  • Soybean down -7.75c to 989.25c,
  • Winnipeg Canola up 1.89$C to 510.5$C,
  • Matif canola up 0.25€ to 366.75€.
  • The Dow Jones up 165.59 to 23328.63,
  • Crude Oil up 0.56c to 52.07c,
  • AUD up to 0.782c,
  • CAD down to 1.26c, (AUDCAD 0.986)
  • EUR was down to 1.175c (AUDEUR 0.664).

Wheat

Wheat under pressure getting within US2 cents/bushel off the late August lows. Friday’s finish was the lowest settlement of the year, so in a sense we have broken seasonal lows. Implied volatility in Dec SRW went out at 16.5pc. The USD index was 0.5pc higher and added pressure to export demand. Russian cash prices remained stable. The latest Committment of Traders report in wheat had SRW -99,400 contracts vs. -90,500 contracts, HRW at -11,800 vs. -6,100 contracts and spring wheat at +2,400 vs. +4,600 contracts last week. The USDA attaché calling the Aussie crop 20Mt, with exports of 18Mt.

Corn

Corn suffered heavy selling that saw it get within US2 cents/bushel of this seasons lows. Friday’s session did represent the lowest close of the season, which could suggest more pain from a technical point of view. Dryness in Brazil has been holding corn up recently, with low soil moisture preventing planting there. This was not considered today, with the market waiting for longer-term weather forecasts to reengage concerns there. Private export sales were announced with 125,000t to unknown and 120,000t to Spain. China sold 1.95Mt of 3.76Mt of offered at government reserve auction. Corn COT at -203.2 vs. -190.3k contracts last week.

Soybeans

The EPA threw some spanners in the works early on Friday, which saw bean oil rally and propped beans up momentarily. Beans were up US7 cents/bushel at one stage, before failing, thanks in part to a stronger USD. The EPA announced that renewable volume obligations would be equal to over above the current amounts. The market was friendly to this early on, but it was not enough to keep bids coming. Soymeal was down US$4.30/tonne, while oil was 33 points higher. A private export sale of 198,000t was announced to China.

Canola

Canola managed a higher close, defying the outside pressure from beans, helped by a weaker dollar and improved crush margins.

Australia

In Australia, last week’s rainfall saw 50-100mm in parts of QLD and NSW, which has had negative impacts on un-harvested crop quality. Early reports are indicating sprouted grains etc. and market has responded with big movement in grade spreads. This weeks forecast features 10-15 mm in parts of QLD and NSW, but could be confined to coastal areas. Victoria could see up to 15mm in most cropping regions. Cash markets have softened with the market anticipating harvest pressure, although with a much smaller crop this year, this may not be as severe.

Source: Lachstock Consulting

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