Overnight futures markets
- CBOT wheat down-5c to 471.5c,
- Kansas wheat down -10.5c to 487.75c,
- Corn down -3.25c to 382.5c,
- Soybean down -2.75c to 1036.5c,
- Winnipeg Canola up 2.09$C to 527.8$C, and
- Matif canola down -0.5€ to 345.75€.
- The Dow Jones up 662.5499 to 24195.75,
- Crude Oil down -0.37c to $US65.5 per barrel,
- AUD up to 0.774c,
- CAD down to 1.285c, (AUDCAD 0.995)
- EUR up to 1.245c (AUDEUR 0.621).
After showing relative strength earlier in the session, wheat sold off before the close, as the weather forecast improved slightly for Hard Red Winter (HRW) wheat growing areas. This week there is potential for 10-20 mm from Thursday to Friday, but this is still not expected to have full coverage.
Implied volatility in May Soft Red Winter (SRW) wheat futures went out at 25 per cent (pc).
HRW conditions report will come out in our day session today and could provide another round of support and justification for the large Commitment of Traders position.
Iraq purchased 50,000t of Australian wheat and 50,000t of US wheat at cost and freight prices of US$309.50/t and $332.17/t respectively.
Russian free on board (FOB) prices were slightly lower at around $208/t FOB for 12.5pc protein.
Corn came under selling pressure ahead of Thursday’s USDA report that will provide estimates on old crop stocks and new crop planting intentions.
The corn balance sheet is tightening in the US and the potential for an acreage battle with beans remains.
Brazil’s safrina crop has received adequate rainfall and shouldn’t have major problems, but the Argy crop is progressively getting worse, if local estimates are anything to go by. This puts pressure on US new crop and the current acreage consensus places a lot of pressure on yield
Soybeans finished fractions lower, off their highs after trading up US11c/bu at one stage.
The market is having difficulty agreeing on a direction and looks to the USDA report this Thursday for the next driver.
The Argy crop is deteriorating and local production ideas are much lower than the USDA’s figures.
The China-US trade muscle flexing seems to have simmered down for now.
Soymeal finished down $2.90/t, while oil was fractions higher.
Aussie prices were well supported yesterday in old crop wheat and barley. It’s very early days, but price action yesterday was suggestive of a drought market.
The rainfall which had been forecast last week did not eventuate, adding to the moisture stress endured by Vic, SA and parts of NSW. The next 8 days looks dry too, so farmers will be very reluctant sellers of old crop with a limited moisture profile to plant into.
Saudi barley went through at US$253-$257/t cost and freight for nearby shipments. The later shipments came in at $242-$244. These were based on new crop replacement, which begins to put a short structure in new crop and place higher emphasis on a timely harvest there. The nearby prices will not work out of Australia, unless F2-grade barley is loaded from a non-China port. But we are not too far away which adds another, higher priced layer of support.