US markets were closed for the Thanksgiving holiday.
- CBOT wheat was closed
- Kansas wheat closed
- Corn closed
- Soybean closed
- Winnipeg canola was down -2.79$C to 520.5$C, and
- Matif canola down -2.25€ to 374.25€.
- The Dow Jones down -64.65 to 23526.18,
- Crude oil up 0.53c to 58.56c,
- AUD up to 0.762c,
- CAD up to 1.271c, (AUDCAD 0.969)
- EUR was up to 1.185c (AUDEUR 0.643).
Nothing major occurred in wheat in the absence of direction from the US. The IGC increased their left their wheat stocks unchanged at 249mmt. Matif wheat futures were fractions lower, down -0.25€ to 162.5€. The increased likelihood of La Nina should provide some price support for beans and corn which would probably flow into wheat given the short structures in wheat and corn, low flat price and potential for a large balance sheet change in 2018-19.
IGC report overnight
The International Grains Council (IGC) updated their global SnD figures increasing bean stocks by 2Mt to 41Mt. The IGC increased their corn ending-stocks up 3Mt to 206Mt. In the absence of the US market we are forced to look abroad for corn pricing. Dalian futures in China have had an impressive month finishing almost 3 per cent higher. Available supplies are becoming difficult to acquire with harvest out of the way and it appears that demand is outstripping supply with ongoing talk of increased imports. In Australia, we are witnessing this first hand in the barley markets, where feed buying has maintained its pace, after playing a huge part in Australia’s record barley exports last year.
Canola was under pressure in relatively thin trade. Weakness in Malaysian palm oil saw it reach a three-month low, after India’s announcement this week of an increase in their import tax. This weighed heavily on oilseed markets. The Canadian dollar was slightly lower against the USD, but not enough to encourage any buying.
The Aussie market has found some support in cereals, given that grower liquidity has been low and quality and yield concerns are building. Traders are bidding up the market to see where the grower liquidity comes in, which is providing support. The major catalyst for this is the in crop rainfall we have received and continue to receive, which is causing delays and potential yield/quality damage. Yesterday rainfall in SA was significant in parts with 25-50mm falling on the Eyre Peninsula. The eoght-day forecast is concerning, calling for 25-50mm of rainfall in Vic and NSW. Given the rain we have already received, this is likely to cause quality issues in wheat and barley and should see quality spreads blow out and basis increase
Source: Lachstock Consulting