Lower for grains, mixed for oilseeds.
CBOT Wheat down -1.75c to 473.5c
Kansas wheat down -3.25c to 482.5c
Corn down -5.25c to 365.5c
Soybean down 0c to 908.5c
Winnipeg Canola up 1.80$C to 475.2$C
Matif canola down -0.25€ to 356.75€’
Dow Jones down -2.530 to 21394.76
Crude Oil up 0.230c to 43.24c
AUD down to 0.756c
CAD down to 1.326c (AUDCAD 1.003)
EUR up to 1.119c (AUDEUR 0.675).
Soybeans unchanged to lower across the calendar, with sellers reluctant to test technical support, given the market structure. Weather conditions in the US are favourable for crop development. Chinese imports out of Brazil set a record in May with 7.94 mmt achieved. Whilst this record is a strong demand signal, it has softened the market recently, with a lack of import demand enquiry due to adequate port supplies. The Commitment of Traders report (COT) had the short at -115.7 vs. -105.8 last week.
Canola was the stand out for oilseeds, with the front month leading the charge. The inverse rallied again (now at $34.40) with the July contract up $4.10. The dry spell experienced in Europe in the last 4 weeks has advanced crop maturity in Canola, with harvest expected to commence sooner than expected.
Corn lower again, breaking technical support. The market rallied early in the session, though bids were exhausted as an improved weather forecast weighed in. USDA report out on Friday is expected to revise corn acres lower in favor of beans, though the market is already pricing this in. Corn COT at -95.3 vs. -65.8 last week, which is not surprising.
Wheat finished mixed with spring wheat continuing its impressive run. Spring wheat is supporting HRW, which is in turn supporting SRW, which explains the relative strength we saw last week vs corn and beans. Friday was the last session for July options and expiries went out as expected. Volatility in the September contract closed at 26%, compared with July that was trading over 30’s last week. Overseas the EU crop has declined significantly in a week with conditions down 6% week on week at 68% good to excellent. The Ukraine is expected to get serious heat this week, which will limited an already thirsty crop. The COT revealed a significant reduction in the SRW short at -75.4 vs. -122.4 last week, which implies that growers were active sellers given the lack of price movement.
Aussie weather forecast doesn’t do much for WA and SA, but it will provide good moisture to NW NSW and Southern Queensland. If it eventuates in NWNSW it should encourage wheat seeding, where planting acres have been limited. Last week saw some coastal showers in Northern and Central WA, which may offer some reprieve for moisture starved crops. SA is looking the worst, having received no rain last week, with nothing on the horizon. Those holding new crop shipping capacity will be getting nervous. Cash markets remain firm in wheat and barley, the surprise strength in wheat suggests a smaller crop than the market is trading, though July tax selling may disprove that.
Source: Lachstock Consulting