Markets

Daily market wire 25 Jan 2017

Lachstock Consulting, January 25, 2017

lackstock1Overview of futures markets:

Grains futures were lower, oilseeds futures were higher.

  • CBOT Wheat was down -6.5c to 426.75c,
  • Kansas wheat down -3c to 441.75c,
  • corn down -6.25c to 363.25c,
  • soybeans up 0.75c to 1058.5c,
  • Winnipeg canola up 3.60$C to 523.4$C, and
  • Matif canola up 2€ to 427.25€.
  • The Dow Jones up 112.86 to 19912.71 ,
  • Crude Oil up 0.20c to 52.95c,
  • AUD down to 0.758c,
  • CAD down to 1.316c, (AUDCAD 0.997)
  • EUR down to 1.07319c (AUDEUR 0.7063).

There were no immediate weather issues for the US or Argentina.  The market was concerned what impact the US removal from the Trans-Pacific Partnership would have on grain and oilseed trade into Asia.

Corn:

Corn traded up to 6-month highs, breaking its 200-day moving average.  It closed weaker with speculation that Trump, signing off on key oil pipeline developments, represented a policy shift away from ethanol and towards oil. Corn market should trade in a fairly tight range until spring wheat planting conditions are realised, given the limited fundamental inputs between now and then.

Wheat:

Wheat followed corn lower with no fresh fundamental inputs and a reduced risk of winterkill in the US due to a forecast of warm and wet conditions.  There were also reports that, in US wheat areas, the winterkill impacts were low to date.  In the last two (wheat futures trading) sessions the market has seen large bid side liquidity, helping positive closes to the sessions.  Today was different.  The market closed at its lows.

We have seen limited demand for second quarter (q2) wheat, with no indications on whether India will be re-entering the market.

The AUD remains strong which is limiting our export competitiveness.

Oilseeds:

Soybeans futures overnight were close to unchanged.  Official estimates from Argentina suggested that 500,000 hectares were lost in recent flooding.  This could reduce the Argentine crop to 52.9 million tonnes (Mt) compared with current the USDA estimate of 57 Mt. China bought some South American beans, but imports are slowing down ahead of their Lunar New Year holidays.  Crushing plants are closed in China until the second week of February.

Canola defied stagnant soybeans and a higher Canadian dollar to closer higher.  Australian new crop canola prices are getting towards targeted levels which is supportive of growers intending to plant new crop canola hectares.

Source: Lachstock Consulting

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