Markets

Daily market wire 24 May 2017

Lachstock Consulting, May 24, 2017

Overnight markets:

Lower for grains, mixed for oilseeds.

  • CBOT Wheat down -4c to 444c,
  • Kansas wheat down -4.75c to 448.25c,
  • Corn down -5.5c to 377c,
  • Soybean down -8c to 950.25c,
  • Winnipeg Canola up 1.30$C to 501.20$C,
  • Matif canola down -0.75€ to 360.50€.
  • The Dow Jones up 43.079 to 20937.91,
  • Crude Oil up 0.359c to 51.49c,
  • AUD up to 0.747c,
  • CAD up to 1.351c, (AUDCAD 1.010)
  • EUR down to 1.118c (AUDEUR 0.668).

Wheat

Wheat lower, lead by weaker EU wheat futures and a stronger USD. Crop ratings had winter wheat up 1pc week on week at 52pc; last year wheat achieved 62pc vs long-term average of 45pc. Like canola, revisions were made to EU wheat yields on account of recent warm weather conditions. In general, we still have the same concerns we had yesterday from a global weather perspective, while early harvested US wheat continues to disappoint from a yield and quality perspective.

Corn

Corn pushed for new near-term highs, but with no major fundamental support, it couldn’t hold on, slipping to close lower. The market decided to focus on seeding progress today, ignoring yesterday’s replanting concerns and viewing excessive moisture as a positive. Weather focus will soon shift to the pollination window, which could spark some action given the large short position.

Soybeans

Soybeans suffered losses as the market digested the previous day’s results from planting progress reports. Soybeans opened unchanged and traded both sides before selling off towards the end of the session and closing on their lows. Not that it was expected to be delayed in beans, but seeding progress came in at 53pc complete, which is the five-year average. Crush margins in China are declining and capacity is not being utilised  Brazil remains a political mess, with the outcome hard to predict. US Gulf soybeans remain competitive in the export space, so we need to see increased demand to engage a futures rally. 

Canola

Canola closed stronger on planting delays in Canada and revisions to European yield estimates. Alberta and Saskatchewan are set to get further rainfall through their northern areas, which will slow up seeding progress in an already delayed crop. If delays continue, some of the crop may not be planted, which should have serious consequences on price.

Australia

The forecast for Australia is dry for the next eight days, with the exception of some parts of Victoria, which doesn’t need it. If we don’t see a change in the forecast for SA and WA in the next week or so, we suspect new-crop drought premiums will increase in the more affected areas. No major changes from a cash market perspective; the barley supply is running out and pricing accordingly, while wheat activity is quiet, almost in no man’s land. It cannot fall much further as it will engage full carry/export bids; perhaps we will see some action in the next two months when barley prices out of export business and the focus shifts to wheat.

 

Source: Lachstock Consulting

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