Friday’s futures markets
Higher for grains and oilseeds.
- CBOT wheat up 9c to 498.5c,
- Kansas wheat up 9.5c to 530.5c,
- Corn up 3.25c to 398.5c,
- Soybeans up 16.75c to 1056.25c,
- Winnipeg canola up C$0.10 to $532.4,
- Matif canola down €2.25 to €343.25,
- Dow Jones down 11.15 to 24311.19,
- Crude oil down US21.9c to $67.97 per barrel,
- AUD up to 0.757c,
- CAD down to 1.282c (AUDCAD 0.971),
- EUR up to 1.212c (AUDEUR 0.624).
Wheat was stronger, despite bearish fundamentals as jitters emerge regarding Australian and Russian production. Canada’s wheat area was higher than the market expected, but the strength in futures came from fund buying, as well as concerns surrounding poor conditions in Australia and question marks in other parts of the world. A forecast for warm, dry weather in Russia is raising some concerns, though it is still early days. Statscan’s area figures came in at 10.2 million hectares (Mha), up 1.2Mha from last year. Weather in the US northern plains is supportive of spring wheat plantings, and could see 13-16 per cent of the crop in the ground by Sunday. Production forecasts for next year’s Russian crop are calling wheat down 10.3 million tonnes (Mt) at 74Mt, with exports forecast at 36Mt.
Corn finished with mild gains, following strength in beans and wheat. Favourable weather in the corn belt could see 19-22pc of the crop planted over the weekend. Brazil is experiencing its second-driest April on record, which is putting pressure on their second crop. In Argentina, the Buenos Aires Grain Exchange (BAGE) called the corn harvest 31pc complete. Statscan called Canadian corn area up 5pc on last year, which was higher than the markets expectations.
Beans found support from extreme strength in soymeal, which rocketed higher, thanks to the collision at the berth at Rosario in Argentina, and the increased demand profile. Damage to the berth in Argentina could take up to one year to fix, and will dramatically reduce the supply of exportable soymeal. The BAGE called the soybean harvest 54pc complete. Soymeal finished up $12 per tonne, while soy oil was down 38 points. China is lowering its value-added tax from 11pc to 10pc at the beginning of May on all agricultural products, which is seen as a positive step towards trade reform.
Statscan has estimated Canadian canola area down from last year to 8.7Mha, down 600,000ha from last year. The market was expecting a higher area, and traded lower ahead of the report, before the surprise came in the form of the lower number, which prompted a turnaround in futures. Friday’s session was choppy, with the market torn between bearish vegoil price action versus potentially bullish area data.
The eight-day forecast continues to disappoint, with nothing major appearing other than light showers expected to bring 10-15 millimetres of rain to south-west Victoria. Cash prices remains supported, with liquidity drying up along with soil-moisture profiles. We have until the end of May to get adequate planting rainfall, but moisture in the long-term forecast has slipped off the radar as of today. We expect to see further strength this week, unless we see a drastic change in the weather forecast.
Source: Lachstock Consulting