Markets

Daily Market Wire 28 November 2018

Lachstock Consulting, November 28, 2018

Mixed for grains and higher for oilseeds.

  • CBOT wheat down 7.5c to 506.5c,
  • Kansas wheat down 6.25c to 483.5c,
  • Spring wheat down 2c to 570c,
  • CBOT corn up 0.5c to 368.5c,
  • Matif corn up €0.5 to €174.25,
  • Soybeans up 13.25c to 875.5c,
  • Winnipeg canola up C$2 to $473.80,
  • Matif canola up €2 to €368.75,
  • Dow Jones up 45.66 to 24685.9,
  • Crude oil down to US$51.61,
  • AUD up to $0.722,
  • CAD down to $0.751,
  • EUR down to 1.129.

Wheat

Cash market weakness and a technical failure in wheat futures drove values lower. Algeria traded at $6 per tonne below market expectations as French sellers discounted under replacement value for 600,000t. This came as a surprise, with Chinese interest in French soft wheat expected to tighten the balance sheet there with obscure demand. The planting window for winter wheat has now closed, and US area is expected to be down on last year, with only 95pc of expected area planted. Emergence came in at 86 per cent versus the five-year average of 92pc. Matif wheat was down €1/t to €201.50/t, Black Sea wheat was up $0.25/t to $247.50, and the ruble rose in value to $0.0149. Sovecon has reduced its Russian export forecast to 34.7 million tonnes.

Corn

Corn finished fractions higher, and traded in light volume within a 3-cent range. The US harvest is 94pc complete, and lagging the five-year average by 2pc.

Soybeans

Soybeans reversed some of yesterday’s losses, despite some tough talk from the Trump Government on tariffs. Harvest pace in the US is 94pc complete versus the five-year average of 98pc. Soybean meal was up $2.2o/t, and soy oil was up 0.21 points. The biodiesel subsidy, under the banner of the US Tax Extender Bill, has been continued, and is worth $1 per gallon.

Canola

Canola was stronger in Canadian and European markets, finding support from sizeable short positions in seed and oil, as well as revised potential new-crop area, given its decline in relative value.

Australia

Aussie cash markets continue to steam ahead, with the absence of grower selling highlighting the vulnerability of our balance sheet. Weather-wise, central New South Wales looks set to receive 15-20 millimetres  of rain as extreme weather lashes coastal areas. Harvest volumes are suggesting that there are no bullish surprises in the east-coast balance sheet, meaning we cannot afford to sustain ourselves priced under Western Australian import parity, and we cannot afford to lose too much WA supply to elastic demand. Recent Philippines purchases of feed wheat out of WA reflect a dangerous threat.

Source: Lachstock Consulting

 

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