Markets

Daily market wire 28 June 2017

Lachstock Consulting, June 28, 2017

Overnight markets:

Higher for grains and oilseeds.

  • CBOT Wheat up 3.5c to 469c
  • Kansas wheat up 4.25c to 475.75c
  • Corn up 0.5c to 367.75c
  • Soybean up 4.75c to 916c
  • Winnipeg Canola up 4$C to 478.1$C
  • Matif canola up 2€ to 358€
  • Dow Jones down -98.88 to 21310.66
  • Crude Oil up 0.43c to 43.81c
  • AUD up to 0.758c
  • CAD down to 1.317c (AUDCAD 0.998)
  • EUR up to 1.134c (AUDEUR 0.668).

Soybeans

Beans stronger on a combination of declining crop conditions, structure, technicals and limited grower selling. The market was up over 10 cents at one stage before closing off the highs. The short position is too big to grapple with the limited grower liquidity we are seeing, combined with a 1% reduction in crop conditions and a USDA report out on Friday.

Canola

Canola followed bean strength posting a strong technical rally, ahead of Thursday’s Statscan report. It is not expected to bring any huge surprises despite some mild acreage reductions. The market is trading a full plant, so any significant deviations from this could affect prices.

Corn

Corn basically unchanged in a weak session compared to other markets. Its currently lacking direction having sold off last week as the weather story disappeared. Crop conditions were unchanged, with most expecting them to lower week on week. The weather story is resurfacing to some extend with concerns for a ridge developing over the western Corn Belt and northern plains. Weather will continue to drive corn prices for the next 3-4 weeks as we near pollination.

Wheat

Winter wheat led higher again by spring wheat, which closed 17 cents higher. The 1% reduction to 41% good to excellent, represented the lowest conditions for this week of the year ever. On top of this the ridge building over the northern plains, was another factor driving the rally. Winter wheat are just along for the ride at this stage, though crops are getting smaller globally. Canadian acres are expected to lower in Thursday’s statscan report, Europe is not improving and Australia is an ongoing concern.

Australia

The Aussie forecast has improved somewhat, SA is still missing out but there is weather building up around it, which may lead to something longer term. WA showers look limited to the coast, but may reach some central and northern cropping areas. NNSW and SQLD are the big winners with 15-25mm set to cover substantial cropping areas. Cash markets remain strong in wheat and barley. Barley strength is easily explained, we have run out. Wheat is a different story though with adequate stocks and limited export enquiry, either we have grossly overestimated the crop size, or the grower is sitting on a huge chunk of grain waiting for the new financial year, or more certainty around new crop potential.

Source: Lachstock Consulting

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