Markets

Daily Market Wire 23 October 2018

Lachstock Consulting, October 23, 2018

Mixed for grains and oilseeds.

  • CBOT wheat down -6.75c to 508c
  • Kansas wheat down -8.5c to 507.75c
  • Spring wheat down -3.25c to 585.5c.
  • CBOT corn up 2.5c to 369.
  • Soybeans up 1.75c to 858.5c
  • Winnipeg canola down C$3.20 to C$491.50
  • Matif canola unchanged at  €373.25,
  • Dow Jones down -126.93 to 25317.41
  • Crude oil up 0.38pc to $69.54
  • AUD down to 0.44pc $0.708,
  • CAD up 0.09pc to $0.763,
  • EUR down 0.41% to 1.146.

Wheat

Wheat finished lower led by HRW which continues to price itself out of export business, building US carryout. Implied vol in Dec SRW finished at 21.22%, Matif Wheat was down -1€ to 200.25€, Black Sea Wheat was down -3.25$ to 242.75$ and the Ruble was up 0.35% to 0.0153. Export sales came in at 385kmt which is below expectations and well below what is required to meet the USDA’s forecast. A stronger USD did not help export potential, with the USD index rallying 0.3pc

Corn

Corn finished with mild gains but failed to push through resistance of the 100-day moving average. Export sales came in at 945kmt below market expectations. The size of the Ukrainian crop is a major talking point for the moment with yields suggesting that its higher than expected, China have reportedly purchased 2 cargoes recently. In the absence of a short fund position and with ample US volume, the path of least resistance for corn could be lower as funds may look to re-engage a short in light of more export competition from South America and the Ukraine.

Soybeans

Beans were fractions higher in an unconvincing session that saw reduced volume. The technical picture is looking grim and the fundamental story is not changing. China appear to have worked out a situation that will not rely on US beans and the longer this goes on, the lower the likelihood of a successful trade resolution. Soybean Meal was down US$-0.30 per tonne and Soy oil was down -0.37 points. Export sales came in at 1.14mmt which was in line with expectations.

Canola

Canola finished softer in both contracts, with weakness in the vegoil complex reducing crush margins and devaluing seed. Chinese customs officials have allowed the import of Canola meal from Canada, which prompted rapid sales this morning. This could lead to a higher domestic crush consumption, but the market did not view this as a positive as it will further reduce a lagging export demand profile and see larger supplies of domestic vegoils.

Australia

Aussie cash markets softened yesterday in limited trade, as the proximity to harvest has prompted some old crop grower selling. Sorghum prices were also defensive as farmer selling has increased now that they have more confidence in their production outlook. Weather wise we are looking for 15-25mm with decent coverage in Qld and NNSW. It will be interesting to see where the bid steps into this market, as most consumers are acutely aware of the tight supplies and know that sell side liquidity will not last long this year.

Source: Lachstock Consulting

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