Daily market wire 5 April 2017

Lachstock Consulting, April 5, 2017

Overnight markets:

Mixed for grains and oilseeds.

  • CBOT Wheat was down -0.75c to 427c,
  • Kansas wheat up 2.75c to 421.75c,
  • corn down -4.75c to 363c,
  • soybeans down -0.5c to 937.75c,
  • Winnipeg canola up 1$C to 485.5$C,
  • Matif canola up 1.25€ to 398€.
  • The Dow Jones up 39.03 to 20689.24,
  • Crude Oil up 0.93c to 51.17c,
  • AUD down to 0.756c,
  • CAD up to 1.340c, (AUDCAD 1.0139)
  • EUR up to 1.0672c (AUDEUR 0.708).


Soybeans closed just below unchanged, after showing strength throughout the session, but failing to carry it through. Fundamentals did not help, with US monthly crush for February lower than expectations at 151 million bushels, while Brazil report record March exports. The market has uncovered some buying at these levels, with flood risks in Argentina a contributing factor.


Canola managed a slightly higher close, in a show of good technical strength. The old crop story in Canada continues to suggest a very tight carryout with strong export and crush consumption.


Corn suffered selling pressure, attributed mainly to spread unwinding with traders taking profit on the long corn/short beans spread. Weekly ethanol production figures were still above last year’s numbers, but not above last week’s. We are entering that window in corn where weather is everything so the market will become hyper sensitive to any variations in the forecast. The outlook for the US Midwest appears promising at present.


The wheat market was mixed by class in a fairly quiet session. Spring wheat continues to get pressure, following the acreage outlook noted in Friday’s report. Hard Red Winter (HRW) wheat was supported by crop rating declines in Kansas, Oklahoma and Texas. In Soft Red Winter (SRW), no notable short covering has been witnessed since the commitment of traders (COT) was reported after the close on Friday. There is some chatter regarding dryness in the Black Sea and Russia, plus high March temperatures in India, though none of this is deemed serious enough to spark a short covering rally at present. The next month will bring a lot of weather volatility and with the funds being close to record shorts in wheat and corn, we should expect to see some fireworks.


The effects of last week’s floods are still being quantified, while the forecast has eased with limited moisture on the 8 day. The most exciting thing today for cash pricing will be the sell off in the Aussie dollar, which has broken through key support. In the absence of grower selling this should enable traders to increase their bids to draw more grain into the export channel.


Source: Lachstock Consulting



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