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Daily Market Wire 3 December 2018

by Lachstock Consulting, 03 December 2018

Mixed for grains and lower for oilseeds.

  • CBOT wheat up 8c to 515.75c,
  • Kansas wheat up 7.75c to 500.25c
  • Spring wheat up 7.75c to 575.75c.
  • CBOT corn up 4.5c to 377.75c
  • Matif corn down €0.25 to €172.75,
  • Soybeans  up 7.5.c to 894.75c
  • Winnipeg canola up C$0.90 to $479.40,
  • Matif canola down €1.00 to €369.70,
  • Dow Jones up 199.62 to 25538.46,
  • Crude oil down 1pc to US$50.93,
  • AUD down 0.1pc to 0.731,
  • CAD down 0.06pc to $0.752,
  • EUR down 0.67 to 1.1310

Wheat

Wheat found support for a host of reasons. In HRW the Dec contract expired with nothing delivered against it, highlighting the strength in cash markets, ahead of an Iraq tender. The carry curve in the US is flattening out which is a sign of increased demand. This is making the fund shorts uneasy. Implied volatility in March SRW finished at 21.01pc. A rumour circulated that Iran will need to step in to buy 2-2.5 million tonnes which was unexpected and should take out any existing stocks available in Russia. Tensions between Russia and Ukraine escalated with the Ukraine placing a ban on men between 16-60 entering the country. Matif wheat was up€1.5/t to€202.5/t, Black Sea Wheat was up $1.25/t to $245.5/t and the Ruble was down -1.22pc to 0.014.

Corn

Corn was a follower of strength in beans and wheat, scratching out a positive close. The US balance sheet needs exports if its too tighten up, so it will be interesting to see how the market responds to the US-China developments. The Commitment of Traders Report (COT) came in -77.7k contracts from -58.8 k contracts.

Soybeans

Soybeans finished higher and we expect to see further increases when the market re opens thanks to a successful meeting between Chinese and US leaders over the weekend. China have made concessions on their tech policies in exchange for the US reducing import tariffs. The COT had the short at -111.4k from 114.6k. Soybean meal was up US$1/t and Soy oil was up 0.14 points. The Buenos Aires Grain Exchange put Brazilian plantings at 41pc completed.

Canola

Canola favoured strength in beans and the hope of a trade resolution over crude oil which was down another 1pc.  StatsCan are releasing their final crop production figures on the 6th of Dec which may threaten the hefty fund short.

Australia

Aussie cash markets softened on Friday with sellers targeting east coast homes as production ideas for WA slowly increase. Weather wise there is nothing major in the forecast which should allow farmers to get a good run at harvest. If futures run away on the China announcement, then this should see a softening in basis that should encourage an increase in export demand.

Source: Lachstock Consulting

 

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