Markets

Daily market wire 24 Jan 2017

Lachstock Consulting, January 24, 2017

lackstock1Overview:

Mixed results for grains and oilseeds.

Indicators:

  • The Dow Jones down -27.40 to 19799.85
  • Crude Oil down -0.39c to 52.83c
  • AUD up to 0.758c
  • CAD down to 1.323c, (AUDCAD 1.003)
  • EUR down to 1.076c (AUDEUR 0.7046)

Beans:

Soybeans down -9.75c to 1057.75c

Dryness in Argentina has prompted selling in soybeans as crop prospects are expected to improve.

Further selling was also encouraged from the unexpectedly long spec position in beans.

Export sales are slowing in the lead up to Chinese New Year, whilst grower selling has eased on the back of recent price declines.

With a long speculative community and the potential for ongoing trade tensions between China and the US, it is easy to foresee panic selling in beans.

Canola:

Winnipeg canola up 0.19$C to 519.8$C

Matif canola up 0.25$€ to 425.25$€

Canola was basically unchanged after trading higher earlier in the session.

Grower selling is increasing on the rally which is adding to price pressure.

Corn:

Corn down -0.25c to 369.5c

The corn market was quiet with limited fundamental inputs.

The market has sustained recent prices on the back of increased grower selling and limited ethanol demand, which suggests underlying buying support.

The technical picture is strong with the market repeatedly failing to break key support levels.

Wheat:

CBOT Wheat up 5c to 433.25c

Kansas wheat up 1.75c to 444.75c

Wheat was stronger in SRW and HRW, while Minneapolis came under pressure.

Spreads narrowed in SRW as front end contracts in wheat were supported on the back of the increased spec short position.

Wheat has support on the back of increased Russian offers into last week’s GASC tender.

Strength in the ruble is reducing grower liquidity and increasing FOB pricing which reduces competition for exports.

Australia:

In Australia, there is 25-50 millimetres of rainfall forecast for Central and Northern NSW which could offer support for sorghum production in the area.

Sorghum acres are expected to be lower this season due to a lack of starting rainfall.

Source: Lachstock Consulting

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