- CBOT wheat up 8c to 426c,
- Kansas wheat up 10c to 425.75c,
- Corn up 2.25c to 350.5c,
- Soybeans up 8c to 999.25c,
- Winnipeg canola down 0.20$C to 520.9$C,
- Matif canola up 0.25€ to 379.25€,
- Dow Jones up 81.25 to 23526.26,
- Crude oil unchanged at US$54.20,
- AUD up to 0.771c,
- CAD down to 1.280c (AUDCAD 0.988),
- EUR up to 1.166c (AUDEUR 0.661).
Wheat posted a strong close, bouncing off yesterday’s levels convincingly. Implied volatility in the Dec Soft Red Winter wheat contract went out at 20 per cent. Weekly exports came in at 347,000 tonnes, in line with market expectations, and South Korea took the lion’s share this week. Hard Red Winter (HRW) premiums continued to push higher, with carries too appealing to prompt physical grain movements. Speculation is building with regards to Iraq’s export demand for HRW this year; their crop is smaller than in previous years, and it’s likely they will need to increase their import program to replenish state reserves. The funds continue to try and bully wheat lower, with open interest up 12,700 contracts in CBOT and 6,400 contracts in Kansas. Most of the fundamentally bearish news feels to be factored in, so a large bout of new fund selling is required to push things lower from here.
The 15-25 millimetres of rain forecast for NSW is still present, and could prompt harvest delays and quality downgrades, but based on the performance of wheat crops in Queensland in the face of severe moisture, we expect to see things hold up reasonably well. Cash markets have nothing new; it is groundhog day until harvest gets under way.
Source: Lachstock Consulting