US wheat futures; Friday’s settlements as follows.
- Chicago wheat July contract up 1c/bu to 442.5;
- Kansas wheat July contract down 4 to 407.5;
- MATIF wheat May contract up €1.50 to €183.50;
- Minneapolis wheat May contract down 7c to 498;
- Corn July contract up 4 to 361.25;
- Soybeans July contract down 5.75 to 867;
- Winnipeg canola May contract down C$2.90 to 439.50
- MATIF rapeseed May contract up €4.75 to €370;
- WTI crude oil June contract Thursday down 0.68 to 65.21 and Friday down $1.91 to 63.30
- Dow Jones closed up 81.23 to 26543.33;
- AUD up to 0.7043;
- EUR up to $1.1149; (AUDEUR 0.6314)
- CAD up to $1.346; (AUDCAD 0.94768)
Market news
Something for everyone on Friday’s market with markets going home mixed to lower. Decent volume traded in the KW v W spreads with indications out of Kansas that yield have the potential to be “yuge” – this will get more airplay over this week as the wheat tour kicks off – twitter will be bombarded with crop estimates. As has been the case for the back end of this growing season – excessive moisture in SRW/corn growing areas have been beneficial for HRW – and we have more of the same on the way with moisture and snowfall being forecast across the corn belt. For context, US corn is still expensive vs SAM but this latest round of moisture + the increasing spec short may have the sellers a little nervous into tonight’s planting pace update. The CFTC Commitment of Traders report showed the spec is still very comfortable being short – record short in many agricultural commodities. Corn and soybeans added 18k and 40k respectively to the net short position over the week which comfortably puts them at a record bearish bet for this time of the year. Historically, being record short ahead of the growing season has been a pretty efficient way to lose money – this year however politics and currency impacts are driving positioning. With the US/China-trade-negotiation can getting kicked further down the road and the Argy Peso in free fall the export prospects for US row crops like dire. Even with planting delays in the US, based on today’s projections the US is building stocks which is supporting the Specs bearish play. This week may test that resolve if the moisture forecasts materialise.
Australia looking hopeful
Rainfall prospects locally are finally looking up – models are aligning, indicating the entire eastern cropping belt could get 15-50mm. As we have been discussing over the last few weeks – the increase in dry sowing makes planted area estimates difficult but, should this moisture materialise production estimates start to look positive again. Markets were quiet at best last week with holiday interrupted trade. We will hopefully have everyone back on deck this week to add some definition to old and new crop markets.
Source: Lachstock Consulting
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