Overnight markets:

Grains and oilseeds all slightly higher, though the closes are a mild summary of a fairly wild session.

• CBOT wheat up 5c to 560c,
  
• Kansas wheat up 10c to 569.5c,
  
• Corn up 3.5c to 392c,
  
• Soybeans up 11.75c to 981.75c,
  
• Winnipeg canola up 6$C to 510.8$C,
  
• Matif canola up 0.5€ to 369.5€,
  
• Dow Jones down 1.10 to 21478.17,
• Crude Oil down 1.54c to 45.53c,
  
• AUD down to 0.760c,
  
• CAD up to 1.296c, (AUDCAD 0.985),
  
• EUR down to 1.134c (AUDEUR 0.669).
  

Wheat

Spring wheat posted the lowest gains for the wheat classes, with a 3.67c gain in Sep, though it did trade within a 94c range! High temperatures and low moisture in the northern plains continue to drive Spring wheat concerns, and that is supporting surrounding wheat classes, despite limited fundamental impacts. Although they managed a higher close, Egypt’s GASC tender provided a reality check to Soft Red Winter and Hard Red Winter markets, with Baltic states and Russia winning the business at US$198-$202 fob, approximately $42 cheaper than US offers on a landed basis. On the protein front, there are some concerns building for high-protein Baltic wheat, with a wet forecast threatening harvest quality there, which is not ideal considering the spring wheat scenario.

Corn

Corn is still very much a follower, but it did manage a higher close, buoyed by wheat and soybeans. Corn is entering a critical development period and the forecast is not ideal, with people scaling back their yield forecasts. The thing holding it back is the large local and global balance sheets, which has seen corn laid off against length in other grains and oilseeds. If the Commitment of Traders data out after Friday’s close reveals limited unwinding of corn shorts, we expect to see corn gain back some ground. In fundamental news, the EPA left the ethanol mandate unchanged, which didn’t have much influence over price action today.

Soybeans

Soybeans again closed stronger, driven by northern plains weather, the fund short, and a technically bullish chart. Soy oil was under pressure with an announcement from the EPA which lowered the biodiesel mandate when the market was expecting a moderate increase.

Canola

Canola continued its run, posting a new four-month high, although it did close off its highs, with a $13 range in the Nov contract. Prairie weather was again the driver, with the market forgetting about the reasonable conditions in other parts of the cropping region and focusing on this. The old-crop inverse is not easing concerns, throwing more fear into the mix. Prairie weather is very important over the next 2-3 weeks, so expect this volatility to continue.

Australia

Nothing new on the Aussie weather forecast, which is very similar to yesterday’s. Some okay showers have fallen in South Australia, giving the Eyre Peninsula crop approximately 5-15 millimetres across most areas. That might buy the crop a bit of time to receive a drought-breaking shower. Cash markets in wheat were rubbish yesterday, with noone wanting to trade it on a flat price with no futures market available due to the US holiday. Cash markets in barley are going to be strong indefinitely, so we will stop mentioning them until harvest, when things may have changed.

Source: Lachstock Consulting