Daily Market Wire 6 February 2019
Modest gains for wheat, corn and soybeans ahead of the USDA’s World Agricultural Supply and Demand Estimates (WASDE) due out on Friday.
- CBOT wheat up 1.5c per bushel to 527.25c,
- Kansas wheat up 0.75c to 511.25c,
- Corn up 1.5c to 380.75c,
- Soybeans up 1.75c to 920.25c,
- Winnipeg canola down C$1.29 to $482.60,
- MATIF canola up €1 to €371.50,
- Dow Jones up 172.15 to 25411.52,
- Crude oil down US$0.88 to $53.68,
- AUD up to $0.72348c,
- CAD up to $1.3132c (AUDCAD 0.95007),
- EUR down to 1.1405c (AUDEUR 0.6342).
Wheat found slight strength as spreads rallied with implied volatility at 20 per cent. In the absence of significant Soft Red Winter wheat sales, Egypt and Indonesia remain talking points. If Indonesia is coming into US calculations, it is primarily because it can’t get its hands on Australian wheat. Due to this, and the fact that Russian prices seem sturdy, the Middle East and North Africa are remaining possibilities for sales. The latest Commitment of Traders report had Chicago short 60,000 contracts from 47,000, along with 15,000 from 9000. We can expect to find some direction with Friday’s upcoming report.
Corn managed to find slight strength overnight. Corn remains driven by demand, the potential of lower production, and fact that ethanol continues to drag the chain. We cannot expect any significant movements until we see the upcoming report.
Beans were also on the receiving end of modest gains of 1.75c. Overnight, the bean market saw 2.6 million sold to China, along with 275,000 to unknown. Although these are worthy sales, they will not make any significant inroads into the US balance sheet.
More rain can be expected in Queensland, and has the potential to make its way into the Channel Country in the state’s southwest. So far, the majority of Queensland’s rain has been flowing out into the Gulf of Carpentaria and the Coral Sea, but as rain makes its way south, it is more likely to make its way inland. Markets in Victoria remain in somewhat of a slump, despite grower selling and harvest pressure drying up.
Source: Lachstock Consulting