Markets

Daily market wire 26 October 2017

Lachstock Consulting, October 26, 2017

Overnight markets:

Mixed for grains and oilseeds.

  • CBOT wheat was down -2.5c to 435.5c,
  • Kansas wheat down -0.5c to 433.5c,
  • corn down -1.75c to 351c,
  • Soybean up 0.5c to 986.25c,
  • Winnipeg Canola up 4.80$C to 514.1$C,
  • Matif canola up 1.5€ to 366.75€.
  • The Dow Jones down -112.29 to 23329.46,
  • Crude Oil down -0.259c to 52.21c,
  • AUD down to 0.769c,
  • CAD up to 1.279c, (AUDCAD 0.985)
  • EUR up to 1.179c (AUDEUR 0.652).

Wheat

Wheat finished with mild losses after showing some promise early on, but running out of buyers. The market was up 5 cents at one stage with technical support combining with an announcement from the Brazilian Ag ministry to uncover a bid. The Ag ministry is trying to get a 10% import duty lifted to lower the landed cost of 750kmt of wheat; most of this would be HRW from the US as the Brazilian millers are reluctant to purchase Russian wheat. Implied vol in Dec SRW went out at 16.65%. Russian cash prices were stable.

Corn

Corn suffered minor losses after attempting a technical rally early on. There is enough US corn stock to dampen any rally at the moment, so we need a new crop story to build things up. That will come if South American planting conditions deteriorate, but for now there is nothing new to trade. Looking further afield Black Sea yields are proving worse than expected, production is 5mmt lower than last year and will reduce exports by the same amount.

Soybeans

Beans finished a fraction higher in another low range session. Meal was $1.20 per tonne higher and oil was down 8 points. With the large recent imports from China the market is expecting a supply stockpile and lower near term demand. Rains in Southern Brazil are improving prospects to get new crop in the ground, but price action suggests the market is not overly convinced just yet.

Canola

Canola went for a run today, with weakness in the currency vs. USD improving crush and import margins. The calculations are making a lot of sense for Chinese imports, so the market is try to get ahead of the curve. The technical picture is promising with the market now looking to make a run at $520 in the Jan contract.

Australia

Nothing new for the Aussie forecast with production ideas consolidating. Cash prices are getting some support from weakness in the Aussie dollar, which has fallen over 2% in the last 4 sessions. The technical picture for AUD looks weak so we may see thing push to the .75 level, which would be great for Aussie flat price.

Source: Lachstock Consulting

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