Daily market wire 4 December 2017

Lachstock Consulting, December 4, 2017

Friday’s futures markets:

Stronger for grains, mixed for oilseeds.

  • CBOT wheat up +5.25c to 438.5c,
  • Kansas wheat up +5c at 436.5dc,
  • Corn up +3.0c to 358.75c,
  • Soybean up +8.5c to 1006.0c,
  • Winnipeg canola down -3.50$C to 506.1$C,
  • Matif canola down -1.25€ to 366.75€.
  • The Dow Jones was down 40.76 to 24231.59,
  • Crude Oil up +$1.0c to $58.32 per barrel,
  • AUD down to 0.759c,
  • CAD up to 1.269c, (AUDCAD 0.963)
  • EUR down to 1.186c (AUDEUR 0.639).


Soybeans found support from South American weather concerns, managing a stronger close bouncing off technical support in a convincing session. Soymeal was up US$3.70 per tonne, while soy oil was down 15 points. October crush came in at 1.759 million bushels, which was above market expectations. This increase reduced oil stocks down 4.95 per cent (pc) from December. The Commitment of Traders Report (COT) came in long 2,200 contracts vs. short -13,700 contracts last week.


Wheat rallied thanks to weather uncertainty in Australia and the US, plus a good wave of global demand, with Saudi tendering over the weekend.
Concerns are developing for dryness in the US winter wheat growing areas, that already have their work cut out, given the expected year on year reduction in acres.
Implied volatility in March Soft Red Winter wheat futures went out at 19.5pc.
Spring wheat prices were the strongest, finishing up 8c/bu, which could be attributed to Australian weather issues and the potential for lower supplies of high protein milling wheat.
The COT for wheat came in as follows: SRW -141,400 contracts from -132,000 contracts; HRW -28,000 from -24,000 contracts; spring wheat +7,900 from 8,200 contracts.


The Canadian dollar was the major source of pressure for canola in Friday’s session, with the movement in futures closely mirroring the strength in currency. The European Commission reduced its production forecast down 600,000t, to 21.7 million tonnes.


 Corn found support from short covering as funds reduced their positions with the commencement of the new month. The corn balance sheet is still heavy and any large rallies should be met with some grower selling. Ethanol demand remains strong, which is helping to shift sentiment. Corn COT reduced the short position to -230,800 from -249,800 contracts.


In Australia the forecast eventuated severely for NSW with 50-100 mm covering most unharvested winter crop areas. Victoria looks to have fared a bit better, particularly in the Wimmera and Western Districts where only 25-50mm fell, which may not cause terrible quality damage. Cash markets will be quiet-to-firmer this week as grower selling will be limited while they assess the weather impacts and prepare to harvest once things dry out.

Source: Lachstock Consulting




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