Overview of futures markets:
Grains and oilseeds futures markets were again lower overnight, notably larger moves in the soybeans, canola and Dow Jones. Positive weather forecasts, combined with Commitment of Trader (COT) positioning lead to the negative sentiment in grains and oilseeds.
- CBOT Wheat was down -6.5c to 414c,
- Kansas wheat down -8.5c to 425.75c,
- corn down -4.75c to 357.75c,
- soybeans down -26.5c to 1022.75c,
- Winnipeg canola down -7$C to 510.9$C,
- Matif canola down -1.5€ to 426.75€.
- Dow Jones index was down -122.64 to 19971.13 ,
- Crude Oil was down -0.60c to 52.57,
- AUDUSD unch 0.755c,
- USDCAD up to 1.311c, (AUDCAD 0.991)
- EURUSD up to 1.069c (AUDEUR 0.7061).
Soybeans saw significant downwards pressure despite decent weekly export inspections. The COT showed a larger net long position than expected, which combined with improved South American weather prospects added to pressure in beans. With China out of the market for the Lunar New Year celebration and the COT on the long side of the market, there is limited volume left on the bid side.
Canola followed soybeans lower, with a stronger Canadian dollar not helping.
Corn lower for similar reasons to beans with a surprise in COT positioning and improved Argy weather. On the demand side, ethanol margins have reduced, with the market still pessimistic about ongoing policy support.
Wheat was lower, with a smaller short COT position than originally expected. Forecast cold temperatures in Russia have not eventuated, which has eased winter kill concerns. The export inspections were in line with expectations, up 25% on last years figures.
Australian market situation:
For Australia, no major fundamental inputs on the export front. Market is monitoring India’s new crop production potential and trying to determine if they will import more wheat in March/April. On the barley front we have seen strong feed demand from China, but need to see Saudi enter the market for their Q2 demand. This was expected to have occurred in late January, so the market is monitoring closely.
Source: Lachstock Consulting
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