Markets

Daily Market Wire 30 July 2018

Lachstock Consulting, July 30, 2018

Mixed for grains and oilseeds.

  • CBOT wheat down 6c to 530.5c,
  • Kansas wheat down 1.5c to 532.5c,
  • Corn up 0.5c to 362c,
  • Soybeans up 9.25c to 870.5c,
  • Winnipeg canola up C$0.80 to 493.6,
  • Matif canola down €0.75 to €368.5,
  • Dow Jones down 85.18 to 25441.88,
  • Crude oil down US$0.81 to $68.8 per barrel,
  • AUD up to 0.740c,
  • CAD down to 1.306c (AUDCAD 0.967),
  • EUR up to 1.166c (AUDEUR 0.634).

Wheat

Wheat was mixed across the classes, with Soft Red Winter (SRW) wheat contracts leading the charge lower as the market caught its breath after a volatile week of trading.

Spring wheat values finished higher, with shorts covering after the Wheat Quality Council’s crop tour revealed lower-than-expected yields. The final yield estimate came in at 41.1 bushels per acre, slightly higher than last year’s figures, but well below the five-year average of 45.4b/acre.

Vomitoxin, hail and other weather-associated damage have drastically reduced the crop from its original potential, which encouraged aggressive selling.

Matif futures fell €0.5/t to €198.25/t. The size of the French crop continues to be slashed, with another forecasting agency, ODI, reducing its estimate to 124.9 million tonnes (Mt) versus the USDA estimate of 145Mt.

Russia’s quality issues are ongoing as its harvest nears completion, and FOB premiums continue to increase there.

The Commitment of Traders (COT) report had wheat contract longs of  24,000 SRW and 22,000 Hard Red Winter contracts, with shorts of 12,900 contracts in spring wheat.

The global supply is not improving, so if consumptive demand pops up next week, we can expect a bullish response.

Corn

Despite weakness in wheat, corn finished just above unchanged. The lower spring wheat yield surprises suggest a potential reduction in corn due to unseasonably high temperatures, and despite good moisture.

The latest COT has funds short 130,000 contracts, down from 129,000 in the previous report.

Soybeans

Soybeans finished with moderate gains, with ongoing demand preventing any short-term concerns.

The USDA announced a sale of 154,000t to an unknown buyers in its daily reporting system.

Soymeal was down 30 cents per tonne, while soy oil values rose 40 points.

The International Grains Council raised global soybean ending stocks 3Mt to 44Mt.

The COT report had the beans short at 60,000 contracts, down from 57,000 contracts previously.

Canola

Canola finished fractions higher in Winnipeg, taking a lead from stronger vegetable oil values, and despite increasing Canadian production ideas. European futures finished lower, with similar price action to wheat.

Australia

The Aussie market was on fire last week thanks to reducing eastern states crop ideas, stronger CBOT values, and a negative three-month climate outlook.

Thursday saw the peak before things consolidated on Friday.

The market is still short of rain in New South Wales, which is what is required to slow things down.

The eight-day forecast disappointed all week, and is still showing no promise. Victoria is improving, but needs a lot more to prop up what is a very late crop before things heat up too much.

Source: Lachstock Consulting

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