Daily market wire 5 June 2017

Lachstock Consulting, June 5, 2017

Up for grains and oilseeds.

  • CBOT Wheat up 0.5c to 439.5c,
  • Kansas Wheat up 2.5c to 433.25c,
  • Corn up 2.25c to 372.75c,
  • Soybean up 9c to 921.25c,
  • Winnipeg Canola up 5.30$C to 499.9$C,
  • Matif Canola up 0.5 at 353.25€.
  • Dow Jones up 62.11 to 21,206.29,
  • Crude Oil down -0.7c to 47.66c,
  • AUD up to 0.743c,
  • CAD up to 1.349c, (AUDCAD 1.002),
  • EUR down to 1.128c (AUDEUR 0.659).


Wheat closed stronger, with spring wheat leading the charge as hot and dry conditions in the Northern Plains raised yield concerns for the relatively low area of planted spring wheat. On top of new-season concerns, there is very limited available supply of old-crop spring wheat, which unlike other wheat markets, leaves no buffer and encourages volatility, something we haven’t seen much of recently. Hard Red Winter (HRW) harvest reports in Oklahoma and Kansas are still not showing anything promising from a yield and quality concern. The wheat Commitment of Traders (COT) report came in at -146,300 vs -140,500 contracts last week.


Corn closed higher following strength in beans and wheat. Weather issues in the Northern Plains, which are affecting spring wheat, could make their way south-east and affect yields. Any corn rally is dampened at present by surplus global stocks, particularly in exporting origins like Brazil and Argentina. COT came in at -224,600 vs -199,300 contracts last week. 


Soybeans posted a minor recovery after the heavy losses they incurred for most of last week. Supportive factors included China’s internal purchase of 169,000t of meal. USDA’s crush report came in at 150 million bushels vs. market expectations of 148.4m. The COT report had beans positions at -113,400 vs -87,600 contracts last week. Beans have been aggressively sold to the point where US beans should buy export demand. Despite an overall bearish fundamentals picture, the risk this week could be to the upside, given fund positions and potential for export business. 


Canola rallied, following strength in the oilseed complex, and despite a stronger Canadian dollar. The July contract was the leader, gaining back $2.7 on the inverse. Concerns are building over unplanted areas in Canada, and the pressure this could place on the balance sheet. 


The forecast for Australia remains dry, though there are some coastal showers building in WA, which could provide much-needed relief if they can shift inland. SA remains bare, with nothing for the next eight days. Cash markets are finding a bit of strength as liquidity dries up, particularly in barley, where the market rallied approximately $3-5/t on Friday on a combination of dry European conditions and tight local supply and demand which is leaving limited volume on the offer side.

Source: Lachstock Consulting


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