Markets

Daily market wire 4 October 2017

Lachstock Consulting, October 4, 2017

Overnight markets:

Mixed for grains and oilseeds.

  • CBOT Wheat was up 3.25c to 448c,
  • Kansas wheat up 2.5c to 441.75c,
  • corn down -2c to 349.5c,
  • Soybean down -1.75c to 966c,
  • Winnipeg Canola up 1.19$C to 499.4$C,
  • Matif canola up 0.25€ to 367€.
  • Dow Jones up 84.06 to 22641.67,
  • Crude Oil down -0.219c to US$50.36,
  • AUD up to 0.783c,
  • CAD down to 1.248c, (AUDCAD 0.978) and the was
  • EUR up to 1.174c (AUDEUR 0.666).

Wheat

SRW and HRW posted slight gains, while spring wheat finished mixed. Implied vol in Dec SRW went out at 18.31%. GASC purchased 180kmt of Russian wheat at around $199 FOB, which is supportive and close to the current fob market once additional tender costs are considered. Winter wheat planting revealed progress was at 36% vs. 43% average, with emergence at 12% vs. 16% average. Iraq announced a tender for <50k milling wheat, while Japan is tendering for 109kmt of US and Canadian Wheat. With the support seen in Russian and Black Sea prices, combined with solid global export demand, in spite of flat price increases, it wont be long until the market finds a bullish story in new crop acres.

Soybeans

Soybeans posted slight losses with meal down $1.80/tonne and oil 23 points higher. A heavy rain forecast was looking good for new crop beans and corn in Brazil, where conditions have been extremely dry. However the distribution is not there with key growing areas looking to miss most of the falls. Lower river levels on the Mississippi are holding up barges and causing a backlog of freight that is impacting corn and bean farmers who are mid harvest. Elevators and warehousemen are cautious of filling up storage and limiting their ability to turn their assets, so subsequent cash bids in some areas are at the lowest premiums seen in year.

Canola

Canola posted slight gains, with a weaker dollar contributing to its support. Canola sales in Australia have been extremely quiet of late as producers await production certainty before increasing % sold. The demand side of things is not encouraging sellers at present with slow export inquiry preventing new flat price highs.

Corn

Corn finished with slight losses in quiet trade. FC stone increased their yield estimate up 0.4 bpa to 169.9 bpa. Brazil’s September corn estimates came in at 5.914 mmt which was well ahead of their August figure and almost twice as much as last years Sep figures. Despite the lower stocks reported in Fridays USDA report, the corn balance sheet still has a lot to chew through. Rallies should be subject to demand, but capped by volume.

Australia

In Australia 25-50 mm of rain has fallen in southern and central QLD, with a further 25-50mm on the forecast for QLD and northern NSW, which should guarantee a full sorghum plant. It is too late to have any affect on winter crops, other than delaying harvest pace and potentially impacting quality. Victoria’s forecast continues to decline with only 5-10mm penciled in. This is a slight concern for the Mallee, which had their second lowest September on record and extremely hot windy conditions two weekends ago, which sapped a lot of stored soil moisture. Victoria is very important to national production this year, so if conditions heat up in the Mallee we may be in for further production declines. After selling off last week on the ‘sorghum forecast’, cash markets in wheat and barley have stabilized, though volumes are light on.

Source: Lachstock Consulting

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