Mixed for grains, lower for oilseeds.
- CBOT Wheat unchanged at 429.75c
- Kansas wheat up 3c to 429.25c
- Corn down -3.25c to 345.5c
- Soybean down -4c to 933.25c
- Winnipeg Canola down -1.69$C to 503.8$C
- Matif canola up 0.25€ to 367€
- Dow Jones up 27.06 to 21892.43
- Crude Oil down -0.469c to 45.97c
- AUD down to 0.790c
- CAD up to 1.261c (AUDCAD 0.997)
- EUR down to 1.188c (AUDEUR 0.664)
Soybeans suffered minor losses, as better US yield potential combines with chart selling to drive things lower. Meal was -$2.2 per tonne lower, while oil was slightly higher. A fresh private export 131 kmt sale was announced to China for 17/18, reflecting solid ongoing demand. In spite of this demand, the increasing crop potential weighs too heavy.
Canola lower, after showing early strength on a weaker Canadian dollar, as traders square positions ahead of the Statscan report. The market consensus is that they will come in at 18.6 mmt, which would reflect ongoing support from a pricing/balance sheet point of view. The problem is that the market estimates vary so much (between 18-20mmt), so anything on the low side should see drastic price action considering the tightness in the balance sheet.
Corn continues to forge new lows as fund selling continues to pile in. US farmers have been noted sellers as they clear old crop inventories to avoid carryover costs and make way for new crop. Corn needs to buy significant demand and until we see that, prices will continue to fall.
Wheat was mixed with SRW and spring wheat slightly lower, while Kansas rallied. Implied vol in Dec SRW came in at 20.14%. Statscan tomorrow will be watched closely. Feels like we have found a bottom for now, with some short covering noted overnight, plus Russian cash prices stabilizing, as well as the market now considering how the current price levels will have on new crop seeding intentions. In the US, the expiry of Sep futures has seen receipt cancelations, given the strength in cash markets vs. that of physical deliveries.
The Aussie weather forecast features no significant rainfall for the next 8 days. The frost risk appears to have eased for now, but the damage assessment of past events will be an ongoing process. Cash markets have stabilized somewhat, with Northern markets strengthening on ideas of smaller NSW and QLD crops.
Source: Lachstock Consulting