Markets

Daily market wire 4 June 2018

Lachstock Consulting, June 4, 2018

Lower for grains, mixed for oilseeds.

  • CBOT wheat down 3c to 523.25c,
  • Kansas wheat down 1.75c to 540.75c,
  • Corn down 2.5c to 391.5c,
  • Soybeans up 2.75c to 1021.25c,
  • Winnipeg canola down C$3.80 to $530.30,
  • Matif canola up €0.75 to €358.50,
  • Dow Jones up 219.36 to 24635.21,
  • Crude oil down US$1.33 to $65.71 per barrel,
  • AUD up to 0.756c,
  • CAD down to 1.295c (AUDCAD 0.979),
  • EUR down to 1.165c (AUDEUR 0.648).

Wheat

Wheat lost ground in a choppy session that featured a 10-cent range. Export sales in came in below expectations at 29,500 tonnes for old-crop and 270,000t for new-crop. Spring wheat felt some pressure from improved moisture forecasts in Canada. Black Sea exports continue to dominate global supply, with the US and Europe both achieving lower-than-expected demand in the nearby. In terms of Black Sea new-crop, weather remains an issue, with only light showers expected in the Ukraine. The Commitment of Traders (COT) report has Soft Red Winter at -19,300 from -29,500 contracts, while Hard Red Winter wheat is at 45,300 from 37,500 contracts.

Corn

Corn was under pressure from improved moisture in the corn belt, which should further improve new-crop conditions. Export sales remain very strong at 993,000t in old-crop and 149,000t in new-crop. Corn COT came in at 204,500 from 215,700 contracts. Corn remains a victim to politics, with the Trump Government managing to offend China and Mexico last week, which could have negative demand consequences. The world balance sheet in corn remains tight, and conditions in the Black Sea are not ideal, but until we see some renewed demand confidence, or a weather scare in the US, there is no catalyst for near-term buying.

Soybeans

Beans found buying support above the 200-day moving average to finish fractions higher. Weekly sales were better than expected at 273,000t in old-crop and 771,000t in new-crop. This countered mounting concerns on China trade issues, which were a huge issue last week after the Trump Government backtracked on its tariff-removal discussions. Importers and suppliers remain very nervous with so much uncertainty. Talk of state-owned Chinese purchases was not enough to increase confidence. Soymeal was down $1.10/t.

Canola

Canola was hit hard in the front month of Winnipeg contracts, as improved new-crop conditions prompted increased grower selling. Matif futures held up well as some minor production concerns build for parts of Germany.

Australia

Cash prices in Australia remain supported thanks to declining conditions in New South Wales, short consumer positions, and limited old-crop supplies. Western Australia and Victoria have received enough rainfall for now, but South Australia could use more. The three-month outlook is calling for below-average moisture, which is not what the market needs. Unless NSW gets 100 millimetres of rain in the next two weeks, expect the market to remain well supported.

Source: Lachstock Consulting

 

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