Daily market wire 30 November 2017

Lachstock Consulting, November 30, 2017

Overnight futures markets:

Stronger for grains, mixed for oilseeds.
  • CBOT wheat up 5.5c to 434.75c,
  • Kansas wheat up 3.75c to 431.5c,
  • Corn up 3.75c to 353.5c,
  • Soybeans down 0.5c to 992.5c,
  • Winnipeg canola up C$1.69 to $510.4,
  • Matif canola up €1.5 to €369,
  • Dow Jones up 95.15 to 23931.86,
  • Crude oil down 62c to $57.37,
  • AUD down to 0.757c,
  • CAD up to 1.284c (AUDCAD 0.973),
  • EUR up to 1.186c (AUDEUR 0.638).


Soft Red Winter and Hard Red Winter wheat traded stronger all day, as the market seems to have run out of sellers for the moment, and spring wheat was fractionally higher. The recent Iraq tender saw Australia with the cheapest offer, but they also booked one US cargo, which was enough to encourage some futures support. China is thought to have purchased some Canadian wheat this week. Matif wheat rallied, while Russian 12.5-per-cent protein was offered slightly lower at $192 for Dec/Jan shipment.


Corn managed a stronger close within a 4.5-cent range. The unwinding of intermarket spreads looks to have provided some support with traders exiting long bean, short corn positions. The rumour mill continues to circulate on Chinese corn and DDG buying. Daily sales sales featured 101,000 tonnes which sold to an unknown buyer. Implied volatility in March corn went out at 13.04 per cent.


Soybeans finished a fraction below unchanged in a relatively quiet and low-range session. Meal was up $2.50/t, while oil closed 12 points lower. The USDA submitted baseline yield projections for beans, suggesting 48.8 bushels per acre, which is 1.1b lower than this year’s figures. The final yields outperform the baseline figures 80pc of the time. Beans featured a flash sale of 263,000t to China. The rainfall forecast for Argentina over the weekend looks to have subsided. What will add some premium to bean markets, if realised, is the European weather models, which suggesti a warmer and dryer outlook for Brazil and Argentina in the 14-day and 30-day forecasts.


Canola managed a higher close, despite weakness in palm oil. A weaker Canadian dollar provided support, which helped it rally for the second consecutive session. With Chinese rape oil holding steady, it is expected that the recent sell-off in Canola will re-engage import demand on the back of improved margins.


Aussie cash markets have been on a tear in the eastern states, with bids increasing over fears of quality downgrades associated with the monstrous weather forecast for Victoria and NSW. The forecast has advanced further and it now looks like 50-150 millimetres of rain will fall on most unharvested winter crops in Victoria, NSW and parts of South Australia. With so much uncertainty around, prices will continue to find support for fixed grades of high-quality wheat and barley. Grower selling is very limited, which is prompting strong nearby bids for traders who need entitlement for vessels loading in December and January.

Source: Lachstock Consulting




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