Markets

Daily market wire 26 April 2017

Lachstock Consulting, April 26, 2017

Overnight markets:

Higher for grains, lower for oilseeds.

  • CBOT Wheat was up 6.25c to 408.75c,
  • Kansas wheat up 10.25c to 412c,
  • corn up 5.75c to 365c,
  • soybeans down -6.75c to 954.5c,
  • Winnipeg canola down $2.70C to $521.2C,
  • Matif canola down -1.5€ to 398€.
  • The Dow Jones up 232.23 to 20996.12,
  • Crude Oil down -0.25c to 49.31c,
  • AUD up to 0.753c,
  • CAD down to 1.357c, (AUDCAD 1.023)
  • EUR up to 1.092c (AUDEUR 0.689).

Wheat

Wheat futures were higher following strength in corn and spring wheat. The USDA came out calling spring wheat progress at 22% vs. 34% average, with more chatter of acreage losses to beans in the northern plains. The rally triggered some buy stops which added momentum. Weather concerns presently for frost in Kansas in the next 5 days and crop damage caused by previous frosts. Globally Russia looks dryer, while France is expecting showers in the forecast, though conditions have been fairly dry there and the forecast continues to delay.

Corn

Corn higher in a show of technical strength, despite a rapid increase in seeding progress, with it currently only 1% behind the average for this time of year. Catalysts look to have been profit taking from the some of the fund shorts. Concerns for planting delays have been increased due to unfavorable rainfall forecast in the delta, which may not be an issue, provided further rainfall does not occur. Farmers need to get acres in before the 15th of May, otherwise there will be issues. Farmer selling activity is limited at current flat price levels, which makes it difficult to keep the demand pipeline fed.

Soybean

Soybeans lower in low range trade, as the USDA announced that planting pace was slightly ahead of schedule, with speculation that more acres will go in to displace spring wheat. Rally in corn and open interest changes in both contracts suggests a large entry into the corn/bean spread. China is slow on the demand front, buying hand to mouth with the knowledge of the large volumes, which are being planted and harvested at present. Weather concerns remain for Argentina where weather is thought to have caused some acreage losses, but this alone is not enough to excite the market at present.

Canola

Canola’s run finally ended with the May contract falling $9, though this contract is about to enter delivery with open interest very limited for shorts needing to roll. The July contract only suffered small losses, with fund shorts still present there and looking to roll. The market has mixed emotions at present, with prairie conditions not favourable for production, while the acreage forecast continues to get bigger, not to mention the foreseeable pressure from the soybean complex. Feels like once the shorts get out of old crop, there is not a lot left keeping things supported.

Australia

In Australia, in addition to being an important day to honour our fallen servicemen and woman, ANZAC day marks an important day for our farmers, as it traditionally represents the commencement of the sowing period. Rainfall in Vic and SA in the last week, would have been welcomed providing much need moisture to a fairly parched profile, which growers can now plant into. While we expect farmers to be busy seeding, we do anticipate an increase in cash selling activity as new crop drought concerns ease.

Source: Lachstock Consulting

 

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