Markets

Daily Market Wire 30 October 2018

Grain Central, October 30, 2018

Mixed for grains and lower for oilseeds.

  • CBOT wheat up 2c to 507.25c,
  • Kansas wheat up 1.25c to 501.50c
  • Spring wheat down 0.25c to 577.5c.
  • CBOT corn down 1c to 366.75c
  • Matif corn up €1 to €170.25,
  • Soybeans down 6c to 839c,
  • Winnipeg canola down C$1.20 to $481.90,
  • Matif canola down €2.25 to €371.75,
  • Dow Jones down -245.39 to 24442.92
  • Crude oil down 0.117 per cent to US$66.80 per barrel
  • AUD down 0.36pc to $0.7050,
  • CAD down 0.23pc to $0.761,
  • EUR down 0.16pc to $1.138.

Wheat

Wheat opened higher trading up US10c/bu at its peak, before the market ran out of sellers and new shorts appeared, not believing that one cargo to GASC was enough to sustain a decent futures rally. Implied volatility in Dec SRW finished at 22.375pc. Matif Wheat was down €2/t to €200.50/t, Black Sea Wheat was up US$0.50/t to $239.50/t and the Ruble was down -0.26pc to 0.0151. US winter wheat plantings were up 6pc from last week at 78pc vs. a 5-year average of 85pc. US weekly export inspections were lower than expected at 393,200t. US wheat needs sustained demand before futures can break out, that means that global flat price needs to increase to force US exports, this does not appear to be a nearby problem, more likely something that occurs late in Q1 next year.

Corn

Corn followed price action in wheat, starting the session with strong gains before profit taking, grower selling and the reality of limited demand kicked in. The ethanol situation in the US is deteriorating with margins under immense pressure, suggesting a long-term decline in domestic demand. Add to this the increased export competition from Argy and the Ukraine and corn doesn’t have a heap of friends. It does have the potential for lower yields, with harvest reports suggesting the USDA is overstated, but the market will not trade that until its official. Corn harvest progress came in at 63pc from 49pc last week. Weekly inspections came in below expectations at 653,000t for the week.

Soybeans

Soybeans showed early strength with Brazil’s Presidential election results prompting bean friendly trade, but then reality set in. That reality is the large carryout stocks that will build in the US in the absence of Chinese demand. Chinese/US talks escalated with the US threatening more tariff restrictions if the two countries cannot reach an agreement when they meet in December. Soybean harvest progress was 72pc vs. 53pc last week. Soybean meal was up US$0.899/t and Soy oil was down -0.27 points.

Australia

Aussie markets were well bid yesterday trading higher in thin volume. The higher CBOT day session combined with revised production concerns in Victoria to reduce seller appetites. The nearby forecast has 10-15mm in Western SA and south east WA, while the 15mm CQ forecast has drifted north and may not penetrate summer cropping areas. Cash markets feel very uncertain now, we are close to harvest, but pressure will only be determined by volume so with WA near export parity and east coast pricing under import parity it is hard to envisage sustained weakness.

Source: Lachstock Consulting

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