Markets

Daily market wire 4 May 2017

Lachstock Consulting, May 4, 2017

Overnight markets:

Mixed for grains and oilseeds.

  • CBOT Wheat unchanged at 454c,
  • Kansas wheat down -4.5c to 463.25c,
  • Corn up 2.5c to 374.75c,
  • Soybean up 6.5c to 975.25c,
  • Winnipeg Canola up 1.80$C to 522.6$C,
  • Matif canola down -0.75€ to 368.25€.
  • The Dow Jones up 8.01 to 20957.9,
  • Crude Oil down -0.219c to 47.6c,
  • AUD down to 0.742c,
  • CAD up to 1.373c, (AUDCAD 1.019)
  • EUR down to 1.088c (AUDEUR 0.681).

Wheat

Wheat was mixed, as the market took stock of the current situation. SRW and HRW futures – CBOT and Kansas respectively – were off significantly before recovering to close unchanged and slightly lower. No doubt that damage was done to SRW and HRW over the weekend and the forecast suggests more rain and frost, so its surprising volatility is not higher. Consensus is that the damage assessment will not be realized until next week, so until then we trade the weather forecast, emotion and fear.  Moisture has improved for France and Russia, which is keeping a lid on things there for the moment, some small chatter of frost in Russia, but appears to be confined to the Northern areas. On the topic of Russia, it appears their trade standoff with Turkey has been resolved, with imports resuming in the next week. Canada’s national statistical agency, Statscan, will report this Friday.  It is expected to increase wheat stocks, though the major chunk of this is durum.

Soybeans

Soybeans were stronger supported by meal demand from China and Europe. The rain event, which has affected corn and wheat, has also ruffled soybeans, with talk of replanting required in the delta. The November chart is pushing up on technical resistance, looking to break monthly highs above last night’s close. The size of South American crop estimates have finally stopped rising, which suggests this is now fully priced into the market. So, with that in mind, it will be interesting to see how price action responds to any demand increases or US production issues, with the fund short where it is.

Canola

Canola higher again with the November contract continuing on its run. Statscan out Friday with March 31 stock estimates, which are anticipated to be 2million tonnes (Mt) lower than last year. EU crop estimates have been revised down approximately 400,000t from last month, due to unfavourable dryness.

Corn

Corn slightly higher as the market continues to digest the weekend’s weather. Replanting is likely to occur in the Mississippi Delta region and while the cold wet weather is affecting current progress the market does not appear to be in panic mode just yet. But we are getting closer to the May 15 window and the nearby forecast is not getting better and the fund short is over 200,000 contracts.

Australia

The forecast remains dry for 8 days in Australia, whilst being good for seeding progress there are some parts of the country which now need a drink. Dry sown crops in parts of WA and SA are raising some concerns, which could amount to more of a story if moisture is not received. Cash markets in wheat and barley remains quiet as execution issues continue. The lower Aussie dollar should see some flow through into cash markets today.

 

Source: Lachstock Consulting

 

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