Overview of futures markets:
Lower across the board for grains and oilseeds.
- CBOT Wheat was down -12.5c to 418.75c,
- Kansas wheat down -9.75c to 444c,
- corn down -3.75c to 360.25c,
- soybeans down -2.5c to 1011c,
- Winnipeg canola down -3.29$C to 512$C,
- Matif canola down -0.5€ to 409.75€.
- The Dow Jones up 15.68 to 20837.44 ,
- Crude Oil up 0.0799c to 54.07c,
- AUD up to 0.767c,
- CAD up to 1.316c, (AUDCAD 1.0106)
- EUR up to 1.058c (AUDEUR 0.7247).
Soybeans under pressure from a reduction in Chinese crush margins and increased crop potential in South America.
Canola followed weakness in palm oil and the broader oilseed complex. Selling eased towards the lows and showed some stability.
Fund selling in corn drove prices lower, the political tensions between the US and Mexico continue to threaten future corn exports from the US. Some market chatter that US corn will be planted early promoting more corn acres, remains only chatter at this point.
Wheat pushed lower by technical selling, with the March contract selling off the most as it nears the first notice (delivery) period. Market has shifted its focus to large old crop stocks in the Black Sea and the impacts of a weakening ruble on global pricing. It is hard to see a huge amount of downside in US wheat at current levels given the demand profile, relative value and the uncertainty surround new crop acres and production.
The outlook remains dry for most of the country, with concerns building for winter crop production.
Jamstec, the Japanese weather model which has been well regarded in picking up previous severe seasonal conditions in Australia, has forecast dryer than normal conditions in Q2 due to an El Nino event and the positive Indian Ocean Dipole. Hard to see a huge correlation between US futures and Aussie wheat values given our weather outlook and the AUD over .767.
Source: Lachstock Consulting