Markets

Daily Market Wire 31 October 2018

Guest Author, October 31, 2018

Mixed for grains and lower for oilseeds.

  • CBOT wheat down 7.5c to 499.75c,
  • Kansas wheat down 6.75c to 494.75c
  • Spring wheat down 6c to 571.5c.
  • CBOT corn down 2c to 364.75c
  • Matif corn up €0.25 to €170.50,
  • Soybeans down 5.5c to 833.5c,
  • Winnipeg canola down C$0.70 to $481.20,
  • Matif canola down €4.50 to €367.25,
  • Dow Jones up 431.72 to 24874.64
  • Crude oil down 0.127 per cent to US$66.19 per barrel
  • AUD up0.69pc to $0.7100,
  • CAD up 0.11pc to $0.762,
  • EUR down 0.23pc to $1.134

Wheat

A stronger USD and lower values out of Russia were the catalysts for today’s price weakness. Implied vol in Dec SRW finished at 22%, Matif Wheat was down -1.75€ to 198.75€, Black Sea Wheat was down -4.5$ to 235$ and the Ruble was up 0.41% to 0.0152. The Pakistani government are rumored to be sellers of 1.5-3mmt of low-quality wheat that will fetch a $5-10 discount to Russian lower protein wheat. Argentina has received beneficial rainfall which will stabilise wheat production there, while new crop planting issues have eased in Europe and the Black Sea.

Corn

Corn suffered minor losses, with weakness in wheat and its own demand woes discouraging any buying support. South Korea have been buying Brazilian corn which serves as the best reminder that US corn is overpriced. It is not currently meeting demand projections and the price will need to respond to increase this. The one supportive factor for corn is the idea that the USDA is too high on this year’s crop yields. Maybe it can’t fall too low before this is addressed, but it can’t climb much from here without a demand story.

Soybeans

Beans had nowhere to go with increased harvest pace, limited demand, limited storage capacity and increase carryout ideas. Trade war talks continue to escalate with the US’s next and final round of tariffs ($267 billion), thought to have the most significance, given that they are related to day to day consumer items that will likely be passed on. Soybean Meal was down US$-3.1 per tonne and Soy oil was up 0.11 points.

Australia

Aussie markets were stronger yesterday as east coast buyers concluded that we cannot stay below WA import parity for too long this year. Last week’s weakness was attributed to some offer side volume finally appearing due to QLD harvest, and growers selling old crop in southern areas. But as soon as it goes we rally again. Last week’s frosts in the Western District are starting to get a bit more airtime with the potential for damage increasing. Weather wise we are looking for 10-15mm with reasonable coverage in NSW and parts of SA

Source: Lachstock Consulting

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