Overnight markets:

Mixed for grains and oilseeds.

• CBOT wheat unchanged at 429c,
  
• Kansas wheat down -3.25c to 430c,
• Corn up +0.25c to 373c,
• Soybean up +0. 75c to 922c,
• Winnipeg canola up +9.80$C to 509.7$C,
• Matif canola down -0.25 at 353€
• Dow Jones down 22.25 to 21,184,
• Crude Oil down -0.28c to 47.38c,
• AUD up to 0.748c,
• CAD was 1.347c (AUDCAD 0.9914),
• EUR up to 1.125c (AUDEUR 0.665).

Wheat

Wheat was mixed with Soft Red Winter contracts unchanged, Hard Red Winter (HRW) off, and spring wheat up again. HRW weakened as harvest pressure and a long Commitment of Traders’ (COT) position weighed things down in the absence of an active bid. The dryness in the northern plains is an ongoing concern for spring wheat, though the trade is becoming somewhat overcrowded with everyone long the spread against winter wheat. We will get to a point where order flow in this market sees a gap lower, though it’s hard to know how high we climb beforehand; fundamentals look supportive and the world is not swimming in high-protein wheat. Crop progress showed HRW at 49pc good to excellent (gte) vs. 50pc last week, and spring wheat at 55pc gte vs. 62pc last week. Global weather has a chance to improve, with Europe and the Ukraine looking at a chance of showers later in the week.

Corn

Corn had a very quiet session with limited inputs to trade. The COT revealed an increase in the short position, and bulls are trying to paint a weather story if the dry forecast in the northern plains shifts south, but it is too early to call. On top of this, there is an abundance of corn around, with grower offers smothering the market every time we near the top of the range. Corn needs something big to get it running. 

Soybeans

Soybeans closed slightly higher in sideways trading sessions. The market is still digesting the record COT position that was revealed after the close on Friday. Export inspections were slightly below market expectations, and for good reason, with Chinese buying as quiet as it is. Informa increased its production estimate for Brazil and Argentina. The market is still facing a supply glut and limited demand, though structure is a part of things now, meaning any bullish news may be overhyped. 

Canola

Canola is running again, lead by the front-month contract, as the inverse overcame selling pressure from last week. The July contract rallied $6.40 more than the November contract. A tight old-crop balance sheet and mounting concerns for Prairie weather is the catalyst. 

Australia

Australia’s weather forecast has changed; with the showers off WA dissipating, they’re now only good for about 5mm in coastal areas. SA is dry, while NSW and southern QLD are looking at heavy coastal showers, which could penetrate inland. Cash markets are seeing a bit of activity in wheat, with basis strengthening as the trade plans its Q4 vessels.

Source: Lachstock Consulting