Markets

Daily Market Wire 24 July 2018

Lachstock Consulting, July 24, 2018

Mixed for grains and oilseeds.

  • CBOT wheat down 2.25c to 513.75c,
  • Kansas wheat up 2.25c to 510.75c,
  • Corn up 2c to 357.25c,
  • Soybeans down 2c to 847.75c,
  • Winnipeg canola down C$3.60 to $486.7,
  • Matif canola up €1 to €361
  • Dow Jones down 13.82 to 25044.29,
  • Crude oil down US$0.46c to $67.80 per barrel,
  • AUD down to 0.738c,
  • CAD up to $1.316 (AUDCAD 0.972)
  • EUR down to $1.169 (AUDEUR 0.631).

Wheat

Wheat finished mixed in the US, with Hard Red Winter and Spring wheat both gathering strength from production and quality concerns in Europe that are boosting future US demand prospects. Values of spring wheat in the US were also supported by hail storms in the northern plains that flattened crops, adding another production issue to the global list. Matif futures finished up €1.5 to €194.75, while Black Sea futures finished higher at $231 per tonne FOB. The EU’s crop-reporting agency, MARS, published an update calling for further downside revisions to production in Europe, stating: “Winter crops and spring cereals in many parts of central and northern Europe were affected by exceptionally dry and warm conditions”. The issues are also mounting in Russia, where quality downgrades are being widely noted as the harvest progresses. Export sales came in at 397,000 tonnes and were uninspiring under the context of US export-demand potential resulting from European and Black Sea production shortfalls.

Corn

Corn export sales came in above expectations at 1.3 million tonnes. Condition reports had corn unchanged at 72 per cent good to excellent, which may have some impact on price, given that the market was expecting a small decline. Sorghum conditions were up 2pc to 49pc good to excellent.

Soybeans

Soybeans finished fractions lower in a quiet, tight-ranging session. Soymeal was up $1.10/t, while soy oil was down 22 points. Export sales came in at 739,000t for the week, slightly below expectations. According to the USDA’s daily reporting system, 160,000t of bean sales to China have been cancelled. Soybean conditions improved for the week, up 1pc to 70pc good to excellent.

Canola

Canola was beaten lower in Winnipeg but remained stable in Matif. European futures are gaining strength from ongoing production declines, while Canadian seed remains a follower of beans and local veg-oil markets. Australian canola is all bid side, thanks to reducing new-crop potential, strength in Europe and a reduction in old-crop offers.

Australia

Aussie markets were unchanged to slightly higher yesterday, undergoing a collective pause to consider the size of the crop we are now pricing. Markets remained bid with thin volume on the offer, but buyers were not resetting things higher, due in part to an eight-day forecast calling for 15 millimetres of rain in Victoria and parts of southern New South Wales. For the market to turn around from here, we would need to see this rainfall transpire, with another 25mm in quick succession. Given that forecasts have had a habit of disappointing this year, plus the dryer outlook forecast by Australia’s Bureau of Meteorology, it’s difficult to foresee this situation unfolding. Western Australian grain remains the cheapest in the country, and an appealing hedge for consumers, given its import and export potential.

Source: Lachstock Consulting

 

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