Higher for grains, mixed for oilseeds.
- CBOT wheat was up 18.25c to 574.5c,
- Kansas wheat up 18.75c to 586c,
- Corn up 1.25c to 371c,
- Soybeans down -9c to 877.25c,,
- Winnipeg canola was closed due to a civic holiday, and
- Matif canola up 3€ to 382.75€.
- The Dow Jones up 39.59 to 25502.18,
- Crude Oil up 0.32c to $US68.81 per barrel,
- AUD down to 0.738c,
- CAD up to 1.30c, (AUDCAD 0.96) and the
- EUR down to 1.155c (AUDEUR 0.639).
Wheat was sharply higher supported by scorching temperatures in Europe and parts of the Black Sea. Implied volatility in Sep Soft Red Winter (SRW) wheat finished at 36.71pc. Matif wheat futures were up €3.75/t to €214.75/t making a new contract high, while Russian free on board (fob) prices rallied US$3-5/t. The Ukrainian government has proposed an 8 million tonnes (Mt) export agreement with shippers, down 20pc on last year. Demand is still kicking around with Jordan in for 120,000t Oct/Nov shipment on the 9th of August, which should reset flat price higher again. The market is focused on this Friday’s WASDE report and how the USDA will manage to reshuffle demand flows given the sharp decline in Europe’s exportable surplus. Wheat still has structure holding it back given that funds are long, but the market tested lower prices in last night’s session and defied expectations. Until global conditions turnaround it’s difficult to see significant sell side pressure.
Corn fractions higher in low and disappointing trade considering the price action in wheat and solid weekly export inspections. It was held back by weakness in oilseeds and a weather forecast that suggests a near perfect finish for the US crop. Corn has the makings of a bullish global SnD, especially now that European feed grains are in rapid decline, but this cannot be realised until US production is known and some of the forecast demand starts presenting in style. Crop conditions after the close had ratings down 1pc at 71pc good to excellent.
Beans were softer in low volume trade with participation declining due to political uncertainty. China continues to explore supplementary feeding for their hogs, reducing their demand for US soy meal and not encouraging anything supportive price wise. Weekly US export inspections had beans up 16pc on last week and 30pc on last year at 893,000t. Soymeal was down $2.30/t and soy oil was down 6 points. Crop conditions after the close revealed a 3pc weekly decline in ratings with beans coming in at 67pc good to excellent.
Canola was higher in Europe as scorching temperatures continue to force production declines. Winnipeg futures were closed due to a civic holiday in Canada and it will be interesting to see whether they follow US oilseed complex weakness or whether the European story encourages a bid.
Aussie markets were higher yesterday despite good rainfall in WA and some minor falls in SA and VIC. ASX wheat finished up A$3/t at $395/t and should push to $400/t today given the overnight movements. The 8-day forecast is showing nothing of significance for the east coast, with some minor falls in South West WA. It’s hard not to sound like a broken record at the moment, but the east coast cannot soften until we get some confidence in production here. WA import parity can cap prices, but it has its own story with export demand increases from Asia and the Middle East as Black Sea flat price rallies.
Source: Lachstock Consulting