Daily market wire 3 May 2017

Lachstock Consulting, May 3, 2017

Overnight markets:

After a promising start things settled mixed for grains and oilseeds.


  • CBOT Wheat  down -2c to 454c,
  • Kansas wheat up 2c to 467.75c,
  • Corn down -5.25c to 372.25c,
  • Soybean down -1.5c to 968.75c,
  • Winnipeg Canola up 5.19$C to 520.8$C
  • Matif canola up 0.5€ to 369€.
  • The Dow Jones up 36.430 to 20949.89,
  • Crude Oil down -0.76c to 48.08c,
  • AUD up to 0.753c,
  • CAD up to 1.370c, (AUDCAD 1.032)
  • EUR up to 1.092c (AUDEUR 0.689).


Wheat was mixed, SRW started strong and rallied, before closing slightly lower for the day as mixed reports came back on the damage report from the weekends weather. The major issue in SRW is to what extent this weather event has/will damage quality, more moisture is on the way so we shall see. Open interest only decreased by 13k, which shows that the short still has a lot more to cover in the event of more weather concerns, which seem likely at this stage. HRW has more upside given the potential for quality damage and yield loss. More to come this week, as crop scouts get into Western Kansas where the major damage is thought to have occurred. France is getting some rainfall, easing some concerns in Europe.


Soybeans slightly lower, pressured by grower selling which was encouraged by yesterday’s rally. Export demand remains quiet, and the futures chart cant break technical resistance (though it looks poised to), due to the constant reminder of large crops, increasing acres and slow demand.


Canola put in a good performance, supported by a weaker Canadian dollar and strength in soy oil. Speculation of an import tax announcement for Argentinian biodiesel is mounting, which is helping keep things supported. Wet weather in the prairies continues to prevent planting challenges, though the forecast looks to be improving.


Corn lower, despite more rainfall forecast for the midwest. This weakness came as a surprise considering the structural position and wheat activity. It seems that reasonable old crop farmer supplies kept things low today. Corn was 34% planted as of Sunday, though the question remains whether anything will need to be replanted after the weekend’s damage.


Australian weather remains relatively dry in the next 8 days, which is good for planting. Worth noting that if this dryness continues there are parts of WA, SA and NSW, which will begin to suffer, which may become a talking point for market bulls. Cash markets were a disappointment yesterday with basis getting belted on the CBOT rally. The east coast market on wheat and barley is penciling in to export calcs, and the grower is rumored to be relatively well sold. But the trade is not returning much which implies that, either growers are not as sold as expected, or the trade are already long in the wrong sites and cannot get a truck, box, train or boat under anything, hence the low appetite. This makes sense considering all of the logistical woes we continue to see this season, the questions is how much things can improve before we have another crop to deal with.


Source: Lachstock Consulting



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