Markets

Daily market wire 6 Dec 2016

Lachstock Consulting, December 6, 2016

lackstock1

Stronger for grains and oilseeds, with the exception of Winnipeg Canola.

CBOT Wheat was up 4c to 408.25c, Kansas wheat down 0.25c to 420.5c, Corn up 12c to 366.25c, soybeans up 16c to 1043.5c, Winnipeg canola down -2$C to 527.3$C, and Matif canola up 2.75€ to 412.5€. The Dow Jones up 45.82 to 19216.24 , Crude Oil down -0.729c to 50.95c, AUD up to 0.746c, CAD down to 1.326c, (AUDCAD 0.991) and the was EUR up to 1.076c (AUDEUR 0.6937).

A big week for production reports with ABARE, StatsCan, Strategy Grain and USDA all out.

ABARE updated its Australian quarterly production figures as follows: wheat up 35% to 32.64 mmt; Barley up 24% to 10.6 mmt; Canola up 22% to 3.58 mmt.

StatsCan report out overnight. Strategy grain out today with Canola at 22 mmt, up 10% YOY.

Wheat balance sheet looking to be the hardest one to solve. Risk that further increases in Canadian production adds stocks to an already heavy balance sheet.

Price-wise wheat is in no man’s land – the fundamentals are very bearish but the market is running out of sellers.

Chatter about commodity rebalancing, with some funds calling for positive 12 month financial growth yields in wheat.

In spite of a heavy balance sheet, this chatter combines with speculation on a very low SRW acreage report, which could see some interesting developments in wheat later in the week when USDA is out.

Below average forecast rainfall in Argentina, encouraged buying in corn and beans. US corn is finding export demand, and negative weather in Argentina will prolong US’s competitiveness and export program. Add to this a sizeable fund position and it’s easy to justify a rally. To beans Crush margins in China are growing supporting continued imports. Palm oil continues to make new highs as to Dalian Soybean prices. Winnipeg Futures slightly lower on long liquidation, improved farmer selling. Volume well above average.

Global Canola balance sheet is supportive of higher prices. Ending stocks forecast to be at lowest level.

In barley news, Saudi Arabia’s Grains Organization bought 960kmt of optional origin feed barley for Jan-March delivery, from a handful of buyers with prices ranging from $178-192 C&F. Current pricing suggests that Australian should take a good part of this demand which should put a floor in feed barley prices in the near term.

Source: Lachstock Consulting 

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