Markets

Daily market wire 31 October 2017

Lachstock Consulting, October 31, 2017

Overnight markets:

Lower for grains and oilseeds.

  • CBOT wheat was down -2.5c to 424.75c,
  • Kansas wheat down -3.5c to 421.75c,
  • corn was unchanged at 348.75c,
  • Soybean down -2c to 984.5c,
  • Winnipeg Canola down -2.30$C to 516.9$C,
  • Matif canola down -0.5€ to 369.5€.
  • The Dow Jones down -85.44 to 23348.74,
  • Crude Oil up 0.219c to 54.12c,
  • AUD up to 0.768c,
  • CAD up to 1.283c, (AUDCAD 0.98625)
  • EUR was up to 1.165c (AUDEUR 0.659).

Wheat

SRW forged a new lower close for the year and also managed to touch the seasonal low formed in late August. The technicals here are looking precarious, if wheat can find the selling to break lower then we might be in store for some pain. The Saudi tender outcomes came in quite cheap, based on Baltic and potential Argy replacement. They bought 484kmt for Dec/Jan arrival with prices ranging from $221.5-$229.5 dependent on disport. This revealed how far away HRW is from buying export demand, with their replacement approx. $12-$15 over the cheapest offer. Russian cash values remained unchanged. Implied vol in Dec SRW went out at 17.25%. In other demand news Ethiopia is tendering for 400kmt, though it will not close until Nov 28, so not going to move the market any time soon. Total wheat exports for the week came in at 315kmt, which is on the low side of expectations. The USDA reported 84% of winter wheat crop planted, which is only 87% below the average

Corn

Corn finished unchanged in another lower range session (2.5 cents). There is absolutely nothing exciting about the corn market at present and the market is responding accordingly. Implied vol in Dec corn is 12.5%. Stocks are high and demand is light, we need time and new crop issues to overcome this. Weekly export sales showed an 18% drop with total figures coming in at 517kmt, putting total year to date exports 45.2% behind last years figures. The US corn harvest is 54% completed as of Sunday.

Soybeans

Beans were softer as funds liquidated their positions ahead of first notice day. Meal was down 20 cents per tonne, while oil was 16 points lower. Export sales came in at 2.5mmt which is large on its own, but the total year to date figures are still lagging last year’s by 9.5%. The USDA reported the US bean harvest at 83% completed. The market showed some promise in the form of a weather bid when the Brazilian forecast appeared dry, before changing later in the day and encouraging selling.

Canola

Canola found some selling pressure to end its impressive push higher. Technical momentum remains to the upside, but the market paused for breath with a softer US dollar putting pressure on local and global crush margins.

Australia

Nothing exciting for the Aussie forecast, aside from 10-15mm looking to assist sorghum production in Southern QLD and Northern NSW. Nothing new for cash markets, with consumers and traders patiently waiting for grower liquidity.

Source: Lachstock Consulting

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