Markets

Daily Market Wire 25 July 2018

Lachstock Consulting, July 25, 2018

Lower for grains and mixed for oilseeds.

  • CBOT wheat down-3.5c to 510.25c,
  • Kansas wheat down -1c to 509.75c,
  • corn down -5.25c to 352c,
  • soybeans up 10.25c to 858c,
  • Winnipeg canola up 3.19$C to 489.9$C, and
  • Matif canola down -0.25€ to 360.75€.
  • The Dow Jones up 197.64 to 25241.94,
  • Crude Oil up 0.81c to $US68.71 per barrel,
  • AUD up to 0.741c,
  • CAD down to 1.315c, (AUDCAD 0.975) and the
  • EUR down to 1.168c (AUDEUR 0.634).

Wheat

Wheat finished with mild losses after following European strength earlier in the session.

Egypt’s GASC purchased 7 cargoes of Russian/Baltic wheat at prices between US$234/t and $237/t CFR (cost and freight). These prices are $16/t higher than the last GASC tender and reflect a good level of support for global flat price.

The question now is when the rest of the global consumers respond. That is all the wheat market needs now to sustain a rally, a large wave of demand that gets US wheat closer to working.

Matif wheat futures were up € 2.25/t to €197/t with forecaster Strategie Grain revising the German crop to 20.7 million tonnes (Mt).

Russian prices continue to firm, with talk of sprouted grains, frosts in spring wheat areas and the suggestion of hot warm temps in early August.

Corn

Corn finished with moderate losses due to improved crop conditions and fresh demand impediments thanks to US farm subsidies.

The world corn market did not respond positively to the US farm support measures, as it is deemed that this could lead to demand destruction, which will support other origin corn but increase the US carry out due to low farmer selling incentives.

Funds were noted buyers of beans and sellers of corn and wheat.

Soybeans

Soybeans finished higher with the Trump government allocating $12 billion to subsidize US corn, soybean, pork, beef, wheat and cotton producers.

This is a redistribution of funds with the government collecting import tariffs from China and redistributing them to producers.

The effect of this was deemed positive for beans as grower selling will be less of an issue given this new level of support.

Longer term, it will limit demand, as higher premiums will detract potential buyers who can pursue other origins.

Soymeal was up 90 cents per tonne and soy oil was up 27 points.

Canola

Canola finished stronger in Canada and fractions lower in Europe.

Winnipeg futures were supported by beans and strong vegoil pricing brought on by the US farm subsidies.

European futures paused for breath despite increasing warm temps and strong cereal pricing.

Australia

Aussie markets remained buoyant yesterday with new crop barley and wheat slightly higher, while old crop was unchanged in thin liquidity.

For winter crop, it’s no longer a question of whether there is a problem, it’s a matter of how big it is.

To see any sort of turnaround we need an inch of rain in NSW, SA and Vic very soon.

The forecast was promising 15 mm, but it’s been underperforming of late and true to form looks to have thinned to 5mm since yesterday.

We expect to see more strength today on the east coast and also in the export states.

If the east coast is in drought mode it will need a lot of west coast grain, grain that will be looking very attractive to South East Asian consumers given the constant increase in Black Sea pricing.

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Source: Lachstock Consulting

 

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