Markets

Daily market wire 6 October 2017

Lachstock Consulting, October 6, 2017

Overnight markets:

Mixed for grains, higher for oilseeds.

  • CBOT Wheat was down -1.25c to 440.75c,
  • Kansas wheat down -1.75c to 434.25c,
  • corn up 1.25c to 349.5c,
  • Soybean up 10.25c to 979c,
  • Winnipeg Canola up 1$C to 500.7$C,
  • Matif canola up 2€ to 370€.
  • The Dow Jones up 100.45 to 22762.09,
  • Crude Oil up US71c to US$50.69,
  • AUD down to 0.778c,
  • CAD up to 1.257c, (AUDCAD 0.979)
  • EUR down to 1.170c (AUDEUR 0.665).

Wheat

 Wheat suffered mild losses with futures markets for both Soft Red Winter (SRW) and Hard Red Winter wheats forging new monthly lows, before finding some mild support from spring wheat, which rallied US5.5 cents/bushel after Chinese purchases added support. Implied volatility in Dec SRW went out at 16.25 per cent. Weekly export numbers were 92,000t ahead of market ideas at 492,300t. Russia’s wheat crop was estimated by the Russian Ag Ministry at 81.4 million tonnes (Mt), while the EU commission also increased its EU wheat production estimate by 1Mt to 140.4Mt, adding the surplus to exports. Russian cash pricing was unchanged.

Soybeans

Soybeans were stronger despite lower than expected weekly export numbers and increased yield number from crop forecaster, Informa, which increased its bean estimate up .6 bu/acre to 50 bu/acre. Chinese demand is expected to engage next week upon return from holidays, which is helping beans catch a bid. Timely rainfall is helping to increase river levels, which is fixing some of the logistical issues, though it is also delaying harvest and contributing to nearby price support.

Corn

Strong export sales, helped corn hold up surprisingly well, with a lot of private forecasters calling for yields well over 170 bu/acre. Informa increased its estimates up 1bu/acre to 170.5 bu/acre. The next USDA report next week will shed more light on this, in the event it increases its estimate from the current 169.9 bu/ac. The market was looking for export figures of 600,000t, but they came in much higher at 814,100t.

Australia

The Aussie forecast still features a good spread of rainfall for the east coast, though it looks to be missing Victoria’s Mallee region, which is where it could have the most impact. As discussed previously, rain now is going to do very little for winter crops in QLD and NSW, except delay harvest and maybe stabilise some crops in central and southern NSW. If rain is received in the Mallee it will top up what’s beginning to be a parched moisture profile that features very thirsty crops. If not received, then the area could suffer yield revisions. Cash markets are jumping around at the moment, particularly in the North where different traders are taking different views on the outcome of this weather, as well as interstate import parity.

 

Source: Lachstock Consulting

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