Markets

Daily market wire 29 November 2017

Lachstock Consulting, November 29, 2017

Overnight futures markets:

Mixed for grains and oilseeds.
  • CBOT wheat was up 1c to 429.25c,
  • Kansas wheat up 2.5c to 427.75c,
  • corn down -2.5c to 349.75c,
  • Soybean down 3c to 993c,
  • Winnipeg Canola up 1.10$C to 517.4$C,
  • Matif canola up 0.75€ to 367.5€.
  • The Dow Jones up 255.93 to 23836.71,
  • Crude Oil unchanged at 57.91c,
  • AUD down to 0.759c,
  • CAD up to 1.281c, (AUDCAD 0.973)
  • EUR was down to 1.184c (AUDEUR 0.641).

Wheat

Winter wheats forged new lows, but managed to consolidate and stop the free fall, despite weaker spring wheat that was down US6.5 cents/bushel. The USDA had the winter crop at 92 per cent (pc) emerged, with the crop rated 50pc good to excellent – down 2pc, in the last conditions report for the year. Egypt bought 120,000t of Russian wheat at values close to replacement. Implied volatility in March Soft Red Winter wheat futures went out at 19.08pc.

Corn

Corn finished lower, with the weight of US stocks and the improved Argentine forecast putting pressure on futures. The USDA released its 18/19 planted acreage projection, 91 million acres, which was up slightly on last year’s figures. Ethanol demand remains strong, though an improved export campaign is required to see corn sustain a rally.

Soybeans

Soybeans copped some minor selling pressure, due reasonable moisture forecast for parched areas in Argentina over the weekend. Soymeal was down US$3.90/t, while oil was 10 points higher. The USDA called 18/19 planted acres 91 million which is slightly higher than last year’s figures. Near-term price drivers for soybeans will be how the weekend weather in Argentina transpires.

Canola

Canola stemmed the bleeding of late, managing a higher close, with support coming from stronger veg oils. Canadian basis has improved on the recent sell off, with speculation building for improved Chinese demand given that Chinese rape oil has not fallen in line with other veg oils. This should improve import margins for Canadian seed.

Australia

The Aussie forecast remains very ugly for winter crops in Vic, NSW and parts of Eastern SA. Vic and NSW are expecting 50-100mm later this week, while SA could get 25-50mm. This is throwing a spanner in the works, with farmers desperately trying to get un-harvested crops off in time. This has seen quality spreads blow out with Australian Premium White (APW) wheat basis increasing and malt barley spreads widening. If this event forces quality downgrades in wheat, then we should see some good export demand from Asian feed users, given that Australian Standard White wheat is not far away from competing into these markets at present.

Source: Lachstock Consulting

 

 

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