Futures closes on Friday were mixed.
- CBOT wheat was down 2.25c to 521.75c,,
- Kansas wheat down -1.75c to 525.25c
- corn up 4.75c to 357.25c,,
- soybeans down -3c to 847.25c,
- Winnipeg canola up $C0.60 to $C489.70, and
- Matif canola down €2.50 to €362.50.
- The Dow Jones up 86.52 to 26743.5,
- Crude Oil up .85c to $US71.62 per barrel,
- AUD up to 0.727c,
- CAD down to 1.290c, (AUDCAD 0.940)
- EUR down to 1.174c (AUDEUR 0.619)
Wheat finished fractions lower but well off its intraday lows with fund selling pressure getting magnified due to unseasonal low traded volumes. Implied volatility in Dec SRW finished at 24.37pc. Matif wheat down €0.75/t to €201.75/t. Wheat’s weekly Commitment of Traders Report (COT) report had SRW -37,500 from -24,300 contracts; HRW +23,100 from +29,100 contracts. Russian wheat harvest is only 73pc completed with their spring wheat experiencing ongoing delays due to untimely rainfall. Moscow-based Institute for Agricultural Studies, Ikar, reduced its Russian forecast to 69.2Mt, with exports at 33Mt. Iraq’s tender results should be announced this week and could support increased US demand and by default futures. The market is still focused on lower Aussie production and the problem this poses for the USDA in their next WASDE report.
Corn bucked the trend today thanks to a consistent short covering bid from funds. The COT position is getting to supportive levels with funds short -176,200 from -86,500 contracts last week. Fundamental catalysts were increasing doubts surrounding the USDA’s recent record yield forecast, as well as cheap relative value and actual demand. US corn now appears US$3/t cheaper than Argy supplies which was supported by a flash sale of 121.7k to “unknown”. If you have been short corn it has worked well and fundamentally and technically speaking the probabilities of uncovering further selling at multi-seasonal lows is difficult to fathom.
Beans finished fractions lower with the catalyst being trade flows between the oilseed complex. Fund were noted sellers of beans/meal and buyers of oil. Soymeal was down $5.50/t and soy oil was up 48 points. COT report had beans -127,900 from -123,500 contracts. The bean SnD doesn’t have a lot going for it, but the danger lies in the short position and the panic that could ensue if any trade resolutions are reached.
Canola finished mixed across the two contracts. Winnipeg futures were fractions higher being caught between the weak seed, high oil liquidity flows. European futures suffered moderate losses as Black Sea supplies prove better than expected.
Aussie markets softened on Friday after posting record highs on Thursday. Buyers became exhausted with the east coast having done enough work to price full execution from WA. i.e. The price difference enables grain to be bought in WA, put on a boat, through a port, on a train and upcountry in some Victorian sites. Weather wise the forecast has some coastal east coast showers (5-10mm) that will do nothing for parched crops but may reduce feedlot buying this week if store cattle prices increase.