Markets

Daily Market Wire 25 September 2018

Lachstock Consulting, September 25, 2018

Higher for grains and lower for oilseeds.

  • CBOT wheat was up 5.25c to 527c,
  • Kansas wheat up 3.75c to 529c,
  • corn up 3.25c to 360.5c,,
  • soybeans down -6.25c to 841c,,
  • Winnipeg canola down $C039 to $C489.30, and
  • Matif canola unchanged at €362.50.
  • The Dow Jones down -167.16 to 26576.33,
  • Crude Oil up 1.51c to $US72.29 per barrel,
  • AUD down to 0.725c,
  • CAD up to 1.294c, (AUDCAD 0.939)
  • EUR up to 1.175c (AUDEUR 0.617).

Wheat

Wheat finished with moderate gains in another low volume session. Implied volatility went out at 24pc. Matif wheat was up €1.25/t to €203/t and Black Sea wheat futures were up US$1.75/t at $242/t FOB. Weekly export inspections came in at 409,500t. Sellers appear exhausted in wheat, but buyers have no incentive from a timing point of view. In two months’ time, when we have greater clarity on Russian export pace and potential convergence with US prices, then bulls will have a reason to get excited. But for now, the market appears happy to sit back and get through Friday’s USDA report. Iraq’s tender had Canada showing the most competitive offer, pipping US wheat by $1/t! Further Middle East demand continues to pop up with Bahrain and the UAE both announcing new tenders.

Corn

Corn finished higher for its fourth consecutive day supported by short covering ahead of month end and Friday’s USDA report. Weekly exports came in at 1.26 million tonnes (Mt) ahead of market ideas. Corn harvest came in at 16pc from 9pc last week with crop conditions up 1pc to 69pc good to excellent. The corn market has gotten itself too short for the moment and with sell side volumes declining some of these shorts are getting cornered.

Soybeans

Beans finished with mild losses with trade issues dominating order flow. The new round of tariffs on $200 billion worth of Chinese goods and $60 billion worth of US goods went into action today. China have refused to meet with US officials, cancelling a meeting this week to discuss their trade relationship. A private sale of 162,000t to unknown was announced but fell on deaf ears given the futility of trade discussions. Weekly exports were 694,000t, highlighting the build-up of carryout that comes when the largest consumer disappears. Soymeal was down -$1.40/t and soy oil was up 18 points. The crop progress report had beans at 14pc vs. 6pc last week, conditions were up 1pc at 68pc good to excellent.

Australia

Aussie cash markets softened slightly with ASX retreating thanks to tired buyers and the widening of the WA east spread, which is enabling execution into inland vic. The forecast is dry for WA, SA and Vic, but shows 10-20 mm for parts of Northern NSW and Southern QLD. This will not have any influence on winter crop production, though it could change the dynamics in the nearby cash market as cattle consumption might leak if feeder numbers dry up. Frost damage in southern states may have been overlooked last week, with some low temps recorded in parts of Western Vic and Eastern SA. The crop still has a lot to overcome and mother nature isn’t helping, but the bid side of the market has done enough for now and we need to see whether weather damage would affect another 1Mt of the crop before we edge higher again.

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