Markets

Daily Market Wire 30 August 2018

Lachstock Consulting, August 30, 2018

All markets were firmer overnight.

  • CBOT wheat up 17.5c to 515.75c,,
  • Kansas wheat up 20.5c to 519.75c,,
  • corn up 0.25c to 341.25c,
  • soybeans up 2.75c to 823.25c
  • Winnipeg canola up $C2.7 to $C491.3,
  • Matif canola up €2 to €373.25
  • The Dow Jones up 60.5499  to 26124.57 ,
  • Crude Oil up 0.19c to 69.71c
  • AUD down to 0.73123c
  • CAD down to 1.29271c, (AUDCAD 0.94815)
  • EUR down to 1.29039c, (AUDCAD 0.94344)

Wheat

The overnight rally in wheat comes on the back of rumours circulating that Russia will cap wheat exports at 25 million tonnes (Mt) vs USDA ideas at 35Mt, compared with previous season exports which were between 41 and 42Mt. The start of next week will be telling with a meeting expected between Russian exporters and Russia’s Agriculture Ministry. Along with this, while Europe will be open, US markets will be closed on September 3 for Labor Day. As a result of this we might be staring down the barrel of a very volatile session. The Australian wheat crop continues to be a talking point with the most recent problems being caused by frost. Tomorrow’s US export sales are expected to hit 350,000t vs a slender 239,000t last week. In order to meet the USDA export target we need to reach 470,000t.

Corn

The corn market hung on for measly gains of only US0.25c/bu. This comes as a surprise considering the overnight strength in the wheat market. This just shows that the corn yield debate continues to be the main driver of the market if wheat numbers are having no bearing whatsoever. Corn sales are expected to reach 200,000t for old crop and 800,000t for new. In order to meet USDA expectations we need to reach 247,000t for old crop.

Soybeans

The bean market held on overnight but the negative sentiment continues. We are expecting a massive crop, the China trade war continues and cash markets are continuing to fall. Surprisingly SX (the November beans contract) was up almost 10c/bu despite the continuing pressure, although selling diminished all hopes of a meaningful recovery.

Canola

Canola futures lost ground, closing almost 1pc down, as lower soy values and currency pressure weighed further on imminent harvest prices in Canada. European rapeseed prices were mostly unchanged.

Australia

Domestically we continue to await the damage caused by recent frost in Vic and southern NSW. Upcoming forecasts suggest that we are through the worst of it but new crop selling in many areas has dried up on the back of recent production concerns and softening prices due to recent rainfall in NSW and Qld. The upcoming eight-day forecast has all regions of Vic and eastern NSW expecting between 15-25mm. South Australia’s South East and Port Lincoln regions may see upwards of 15mm whilst cropping areas of WA can expect between 5-10mm.

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