Markets

Daily market wire 27 October 2017

Lachstock Consulting, October 27, 2017

Overnight markets:

Lower for grains, mixed for oilseeds.

  • CBOT wheat was down -3.75c to 431.75c,
  • Kansas wheat down -5.25c to 428.25c,
  • corn down -0.5c to 350.5c,
  • Soybean down -3.75c to 982.5c,
  • Winnipeg Canola up 2.19$C to 516.3$C,
  • Matif canola up 1.75€ to 368.5€.
  • The Dow Jones up 71.40 to 23400.86,
  • Crude Oil up 0.64c to 52.82c,
  • AUD down to 0.766c,
  • CAD up to 1.284c, (AUDCAD 0.984)
  • EUR down to 1.165c (AUDEUR 0.657).

Wheat

Wheat came under pressure on the back of disappointing US sales, which came in at 360.6kmt vs. market expectations of 400kmt. HRW was particularly disappointing at 86.9kmt, considering the recent Iraq sale makes up 50kmt of that. Implied vol in Dec SRW went out at 16%. Saudi are holding a wheat tender over the weekend which is expected to get filled predominately by Baltic wheat. China kept their low tariff wheat import quotas unchanged at 9.64mmt.

Corn

Corn had another quiet session, featuring a 2.5-cent range. Harvest volumes continue to add weight and overall demand is not enough to have a bullish influence on the balance sheet at present. Export sales were better than expected at 1.288mmt. In global news, China sold 506kmt of corn in a government reserve tender; they also kept their low tariff import quota at 7.2mmt.

Soybeans

Beans finished slightly lower, ignoring better than expected export sales and focusing on an improved forecast in Brazil and weakness in their currency. Weekly export sales came in at 2.129 mmt, 67% higher than last week’s figures. China took out the lion’s share of this demand at 1.567mmt. Meal was down $3.30 per tonne, while oil was 24 points higher.

Canola

Canola had another impressive session, which featured highs of $519.30. The market settled off its highs but still managed a positive close, suggesting that we could push through technical resistance at $520. Local and global crush margins are improving, fuelling speculation that China will import a large amount of Canadian seed. CADUSD was lower again, which helped fuel the bid.

Australia

Nothing new from an Aussie weather perspective, with the only rainfall being some patchy showers in parts of Vic (10-15mm). Early quality assessments of last week’s heavy rainfall in SQLD and NNSW are surprising to the upside, with less quality damage than expected. Cash markets remain quiet in Wheat as traders await harvest pressure; in a slow grind lower which is seeing us get pretty close to SEA demand. Barley market is interesting at present with reports of China recently purchasing cargoes of Aussie feed at values above replacement in some port zones. If last years pace is anything to go by we will be out of barley before q3.

Source: Lachstock Consulting

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