Markets

Daily market wire 24 October 2017

Lachstock Consulting, October 24, 2017

Overnight markets:

Higher for grains and oilseeds.

  • CBOT wheat was up 10.75c to 436.75c,
  • Kansas wheat up 10.75c to 433.5c,
  • corn up 6.75c to 351.25c,
  • Soybean up 1.75c to 991c,
  • Winnipeg Canola up 0.39$C to 510.9$C,
  • Matif canola up 0.5€ to 367.25€.
  • The Dow Jones down -11.26 to 23317.37,
  • Crude Oil up 0.059c to 51.9US$,
  • AUD down to 0.780c,
  • CAD up to 1.264c, (AUDCAD 0.986) and the
  • EUR was down to 1.173c (AUDEUR 0.664).

Wheat

 Wheat bounced after getting within 1.25 c/bu of contract lows in an assertive technical reversal. Implied vol in Dec SRW went out at 17.5pc. The market found it hard to uncover more sellers, with a lot of chatter regarding new crop wheat acres and the low intentions that will result at current price levels. In US Cash markets HRW premiums were 5-10 c/bu higher, while SRW premiums were unchanged. Iraq purchased 1 cargo of HRW at US$299/t cost and freight (CNF). Russian cash prices were stable, with 12.5pc protein wheat unchanged at US$193/t free on board  (FOB). The USDA crop progress report showed the winter wheat at 75pc planted vs. an 80pc average for this time of year.

Corn

Corn followed wheat higher, supported by its own technical story that saw it get within half a cent of this years contract lows. Fundamentals remain the same with heavy US and global old crop stocks. Weekly export inspections were on the low side at 614,000t. The USDA harvest progress report had corn at 38pc complete vs. an average of 59pc for this time of year. To sustain a rally in corn we need to see consistent old crop demand and ongoing planting issues for Brazil and Argentina.

Soybeans

Soybeans finished a fraction above unchanged, in a mild session featuring a 7c/bu range. Market looks to be in a holding pattern pending confirmation of the Brazilian forecast. A weaker Brazilian currency brought cash offers lower, but did not entice any demand. Soymeal was down $1.20/t, while soyoil was up 47 points. Weekly export sales reached a marketing year high at 2.56Mt, though the pace still trails last year’s by 8pc. USDA harvest progress showed beans at 70pc vs. a 73pc average.

Canola

Canola pretty much unchanged today, taking direction from a stagnant beans market in a session that featured only a Can$3.3/t range. The situation is relatively unchanged for Canola, the market is awaiting the presence of Chinese demand and Canada’s harvest is nearing completion, taking some sell side pressure off cash prices.

Australia

Aussie weather features 10-15 mm for parts of Victoria, unfortunately not the Mallee which is in the most need. The rest of the country is dry, which will be helpful for winter crop harvest in NNSW and SQLD where harvest has been delayed by rains that have also damaged quality. Cash markets were quiet yesterday with futures at their lows. The market feels reluctant to buy on account of perceived harvest pressure, though the crop is a lot smaller and we are already at export parity. Will be interesting to see how much harvest pressure actually occurs.

Source: Lachstock Consulting

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