Markets

Daily market wire 3 August 2017

Lachstock Consulting, August 3, 2017

Overnight markets:

Mixed for grains and stronger for oilseeds.

  • CBOT wheat down 0.25c to 487.75c,
  • Kansas wheat down -0.75c to 492c,
  • Corn up 2.5c to 379c,
  • Soybean up 6.5c to 970.75c,
  • Winnipeg Canola up 2.5$C to 506.4$C,
  • Matif canola up 1.75€ to 368€.
  • The Dow Jones up 52.32 to 22016.24,
  • Crude Oil up 0.350c to 49.51c,
  • AUD down to 0.796c,
  • CAD up to 1.256c, (AUDCAD 1.000)
  • EUR up to 1.185c (AUDEUR 0.671).

Wheat

Winter wheats were flat, while Spring wheat posted a 4-5 cent gain. Early harvest pressure was noted in Spring wheat, where Northern plains yields and quality are coming in with mixed results. Canada’s early yields are proving to be lower than expected, which adds to the tight global hi protein balance sheet. Volatility in the Sep contract went out at 24.25per cent (pc). Global weather features hot dry conditions for Canada, Wet conditions for Northern EU and dryness in Russia. Russia is sitting on a lot of wheat, and US wheat has fallen to become competitive in some classes. With the USD continuing to decline, it feels like only a matter of time before Russian offers take the market for a ride lower.

Corn

Corn posted a minor recovery to claw back some of yesterday’s losses. Dec corn is currently only 5 cents above its yearly lows and with early harvest underway and a lot of varying opinions on yield potential, its hard to see it breaking too much lower for the moment. FC stone yield forecast 162.8 bu/acre, which compares with USDA 170.7 bu/acre July number.

Soybeans and canola

Soybeans managed to stem the previous days losses, avoiding a close through the gap at 963 in the Nov, by staging a mild recovery. The improvement in conditions is still weighing heavily, though there is a lot of varying yield reports around. Crush numbers for June were above expectation, which tightens the balance sheet slightly, though for now it’s all about production. Time and weather in the next three weeks will tell. A stronger dollar and ongoing dry hot prairie weather helped build support. Chinese demand is lighter considering the current discount to soybeans. On top of this European yields are improving as harvest progresses, so it will be interesting to see what drives things from here.
Canola followed the soy complex, to post a slightly higher close.

Australia

Aussie weather forecast features good rainfall for everywhere except for Northern WA and Western NSW. Weekly rainfall so far has provided welcome relief to moisture stressed crops, though more is required to keep things going. The BOM is calling for below average rainfall in Q3, which if proven to be true could easily raise talk of sub 20Mt wheat again. If weather and yields do improve we are still looking at a late crop, which might see some strong nearby bids for old crop, from those with early harvest shipping capacity.

Source: Lachstock Consulting

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