Markets

Daily market wire 30 Jan 2017

Lachstock Consulting, January 30, 2017

lackstock1Overview of futures markets:

Grains and oilseeds markets both were lower in futures trade on Friday night.

  • CBOT Wheat was down -6.5c to 420.5c,
  • Kansas wheat down -6c to 434.25c,
  • corn down -1.25c to 362.5c,
  • soybeans down -0.25c to 1049.25c,
  • Winnipeg canola down -2.39$C to 517.9$C,
  • Matif canola up 0.5€ to 428.25€.
  • Dow Jones index was down -7.13 to 20093.78 ,
  • Crude Oil was down -0.579c to 53.2c,
  • AUDUSD up to 0.755c,
  • USDCAD down to 1.313c, (AUDCAD 0.991)
  • EURUSD up to 1.072c (AUDEUR 0.704).

 

There is limited bullish information, and much negative sentiment, across the board for grains.  Grains and oilseeds markets are overshadowed by threats to trade policy and uncertainty about actions of the new US president.  The potential trade war between the US and Mexico could have dire consequences on US agricultural exports.

The Commitment of Traders report is issued every Friday afternoon (US time), by US Commodity Futures Trading Commission(CFTC) link here. It is a guide to futures positions held by traders the previous Tuesday. Last week’s report showed significant movements in fund positioning compared with the previous week.  CBOT wheat is the only short left (at -98.5 k contracts), while beans are +153.3 vs 119.9 last week with corn at +14.2 vs -47.5.  Long corn and bean markets are not helped by the turbulent political environment.  Markets could see increased volatility.
Friday’s wheat futures suffered the most with limited fresh fundamental input. Calendar spreads were slightly weaker and volatility in March was lower.
It was surprising that soybeans were almost unchanged, given both the lack of fresh trade due to Chinese New Year holidays and the potential for the South American soybean crop to improve.
Canola technical selling occurred as the March contract broke support levels at $520.
The corn market closed lower in spite of good export demand.  Two long-term aspects seen as negative to US corn price are potential for reductions in exports of US corn to Mexico and possible reduced support for ethanol manufacture.

Weather:

Russia is expecting an extremely cold snap over the next 5 days, which could damage winter wheat in areas with insufficient snow cover.  Australia’s weather forecast is for good rain in WA, SA and Victoria in the next 8 days.

Source: Lachstock Consulting

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