Daily market wire 30 Nov 2016

Lachstock Consulting, November 30, 2016


Red across the screen for grain and oilseeds, with Matif Canola the only positive finish. The cause of the sell off, a combination of macro and fundamental inputs.

CBOT Wheat down -7.75c to 408.75c, Kansas wheat down -12.25c to 418.25c, Corn down -9.25c to 349c, soybeans down -13.5c to 1042.5c, Winnipeg canola down -5.295$C to 519.6$C, and Matif canola up 1.75€ to 404.5€. The Dow Jones up 23.69 to 19121.6 , Crude Oil down -1.85c to 45.23c, AUD up to 0.748c, CAD up to 1.343c, (AUDCAD 1.005) and the was EUR up to 1.064c (AUDEUR 0.7025).

Crude oil off 4% on doubts over whether OPEC can reach an agreement. This combined with early USD strength put pressure on the oilseed complex. Canola lower following this and lower palm oil. Corn experienced heavy spec selling with 50 and 100 day moving average being broken, this technical weakness could encourage further selling. Wheat also in trouble technically with WH making new lows. Kansas wheat spreads came close to trading full carry, whilst SRW spreads remained weak on the expectation that deliveries will occur. Implied volatility in WH down 1% to 21.25%. New moisture came into the forecast for the Plains and delta, abating concerns for 2017 winter wheat production.

USDA announced long term projections of lower new crop corn and wheat acres, not enough to paint a bullish picture due to current season stock burden.
Algeria bought three cargoes of Argentinian wheat which added to wheat pressure, as market yet to see aggressive Argy selling. Egypt bought 240k Russian origin wheat at approx. 202 C&F, the last purchase at the beginning of this month was $2-3 lower.

Australian wheat prices have fallen against Black Sea values to levels which have traditionally encouraged consumer demand, but with a large crop part way through harvest, they feel they have time on their side.

Barley prices in Australia under pressure yesterday falling approx. $6 from last week, predominately due to grower selling. It’s hard to see this continuing considering ongoing Chinese demand and our low relative value which should see increased Saudi imports.
Source: Lachstock Consulting 


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