Markets

Daily Market Wire 28 June 2018

Lachstock Consulting, June 28, 2018

Mostly higher for grains and oilseeds.

  • CBOT wheat up 5.5c to 488.5c,
  • Kansas wheat up 2.75c to 478.25c,
  • Corn up 0.5c to 361.75c,
  • Soybean unchanged at 873c,
  • Winnipeg canola up 2.20$C to 523.7$C,
  • Matif canola up 5.25€ to 356.75€.
  • The Dow Jones down -165.52 to 24117.59,
  • Crude Oil up 1.77c to $US72.3 per barrel,
  • AUD down to 0.733c,
  • CAD up to 1.333c, (AUDCAD 0.978)
  • EUR down to 1.155c (AUDEUR 0.635).

Wheat

The bleeding stopped for wheat, an “inside day,” a term used in technical analysis.  It doesn’t suggest a price turnaround just yet, more of a pause for breath, combined with some position squaring ahead of the report on Friday.

Hard Red Winter (HRW) continues to decline against Soft Red Winter (SRW), as grower harvest selling combines with a large long fund position to create big order flow problems.

Implied volatility in Sep SRW went out at 24.5pc.

The market is looking for 375,000t of export sales in tomorrow’s weekly report.

The Egyptian government announced that their crop is 450,000t smaller than last year’s, which will increase their export demand.

Corn

Corn finished fractions higher in a tight ranging session.

Ethanol production figures were supportive coming in at 1.072 million barrels, which is the highest production since December last year.

The average market guestimate for export sales tomorrow is 1.1 million tonnes (Mt), consisting of 800,000t old crop and 300,000t of new crop.

US weather is heating up and showing signs to continue if the longer-term forecast eventuates. This could pressure US yields and prompt a turnaround in price action, given how far we have already fallen, plus the world’s heavy reliance on US production this year.

Soybeans

Soybeans finished fractions higher, with position squaring noted ahead of the Friday USDA report as well as month and quarter end.

The market is expecting 450,000t of US export sales when the weekly report is published tomorrow.

Soymeal was unchanged, while soy oil was up 10 points.

The Trump government dropped their plans to impose limitations on Chinese investment in US technology, which was seen as a very important step towards reaching a trade resolution.

Markets should respond favourably if this talk continues.

Canola

Canola found support, led by EU markets that found a punchy bid as crop production concerns there continue to evolve.

Canada has ongoing concerns in the Prairies with farmers reluctant sellers due to observed yield stress.

Australia

Aussie markets bounced back yesterday as the promising looking forecast did not deliver.

Downs markets rallied around $10 as consumers and traders saw new risk in lower production.

WA is looking to receive 25-50mm with reasonable coverage, which should ensure reasonable production there.

The NSW/QLD forecast looks more disappointing today, so we expect to see ongoing price support on the east coast as a result.

Source: Lachstock Consulting

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