Daily market wire 29 May 2018

Lachstock Consulting, May 29, 2018
Drop in oilseed values outside the United States, where markets were closed for Memorial Day.
  • Winnipeg canola down C$1.89 to $536.2,
  • Matif canola down €0.75 to €362.5,
  • Dow Jones down 58.66 to 24753.09,
  • Crude oil down US$1.41 to $66.47 per barrel,
  • AUD down to 0.754c,
  • CAD up to 1.299c (AUDCAD 0.980),
  • EUR down to 1.162c (AUDEUR 0.648).


Matif wheat futures were up 0.68 per cent, making new highs not seen since July last year, thanks in part to a softening local currency which made a fresh yearly low.


Crude oil values have fallen 8.8pc in four trading sessions in response to Russia and Saudi Arabia forecasting further production increases in the second half of 2018. Crude oil has been very strong of late, with increased speculative longs flowing into the market. This could have negative consequences for grain and oilseed markets if it becomes the catalyst for risk-off behaviour, or it slows vegetable oil and ethanol demand. Malaysian palm oil futures were down 1.5pc.


Canola futures sold off in Europe and Canada, with a weaker vegoil complex contributing to the negative tone. Harvest in the Canadian prairies is nearing completion, with concerns emerging for dryness in western areas.


In Australia, markets were quiet yesterday, with solid West Australian rainfall and some potential in the longer-term NSW forecast discouraging buyers from returning any of the futures movement from Friday. It’s hard to believe this far out, but one forecast is calling for 70-90 millimetres of rain for NSW in the first week of June. The probability of this occurring is very low, but it’s enough to take the urgency out of short-covering for the moment. The trusty Bureau of Meteorology eight-day forecast features no significant moisture, other than some coastal showers in southern WA.


Source: Lachstock Consulting


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