Markets

Daily market wire 7 Dec 2016

Lachstock Consulting, December 7, 2016

lackstock1

Slight gains in corn and oilseeds, slight losses for wheat.

CBOT Wheat was down -1.5c to 406.75c, Kansas wheat down -3.75c to 416.75c, Corn up 1c to 367.25c, soybeans up 4.25c to 1047.75c, Winnipeg canola up 1.40$C to 528.7$C, and Matif canola up 1.5€ to 414€. The Dow Jones up 35.539 to 19251.78 , Crude Oil down -1.05c to 50.74c, AUD down to 0.74601c, CAD up to 1.328c, (AUDCAD 0.9908) and the was EUR down to 1.071c (AUDEUR 0.6958).

StatsCan out overnight pegging wheat at 31.7 mmt (1 mmt over market expectations), adding further supply to the overburdened wheat crop.

Ongoing talk that three Argy wheat vessels have passed Algerian business inspections, this is reasonably negative for HRW (Hard Red Winter) wheat exports, the dominant class of US wheat exports.

In the absence of any export demand, HRW and SRW (Soft Red Winter) closed lower. A stronger USD added more pressure, US wheat is short of friends.

Argentina and Aussie crops getting bigger, which suggests that US wheat exports will be lower and a rally will only come from lower new crop acres and index fund rebalancing, which is some time away.

Dec Chicago contract deliveries completed with nothing suggesting anything further than domestic milling demand. Be interesting to see if calendar spreads reflect current lack of export demand in WH/K.

10-15 day Argy forecast looks dry which helped keep Corn and beans bid. Short covering in corn, plus new export business to Korea.

Hard to see sustained upside in corn as feed wheat supplies will eventually provide pressure. Beans stayed strong with positive crush margins and reports of new export business, (198k to china and 378 to unknown). Dalian futures higher with Malaysian palm oil making another 4 year high. StatsCan Canola production 400 kmt below market expectations at 18.4 mmt. Canola futures higher after report, could not breach previous highs and settled slightly off them.

China import demand for US sorghum continues but rally in corn has them pricing out.

Could be positive for Australian feed barley exports at the right spread. This combined with the supportive Saudi tender results suggest near term support for feed barley pricing. Statscan pegged Canadian barley crop up 6.8% at 8.78 mm.

USDA report out Friday with updated production and SND tables.

Source: Lachstock Consulting 

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