Overnight futures markets:
Lower for grains and oilseeds.
- CBOT wheat down down -7.5c to 425.25c,
- Kansas wheat down -8c to 423.5c,
- Corn down -1c to 352.75c,
- Soybean down -5.75c to 1014.75c,
- Winnipeg canola down -1.70$C to 508$C, and
- Matif canola down -2.50€ to 366.5€.
- The Dow Jones down -44.73 to 24,135.91,
- Crude Oil down -1.63c to $55.99 per barrel,
- AUD down to 0.756c,
- CAD up to 1.279c, (AUDCAD 0.967)
- EUR was down to 1.179c (AUDEUR 0.640).
Wheat was hit hard with Minneapolis futures leading the charge, thanks to a Statistics Canada (Statscan) figure well above market expectations. The trade was expecting a figure around 28 million tonnes (Mt) for all wheat, but it came in at 29.9Mt; spring wheat’s estimate came in at 22.17Mt, 3.28Mt above their September estimate. Russian cash prices were off slightly, trading at US$190/t free on board. Implied volatility in March Soft Red Winter wheat futures went out at 18.76 per cent (pc).
Corn fractions lower, holding up surprisingly well given the weakness in beans and wheat. Weekly ethanol production set new records last week at 1.108 million barrels per day (bpd), which was 42,000bpd higher than the previous week. This is combing with slow grower selling, to keep basis firm and discourage futures selling pressure. Statscan’s figure for corn was neutral at 14.095Mt and very close to market expectations.
Soybeans traded a decent range in both directions today, before settling lower as an improved Argentine forecast took the sting out of things. Soymeal was US$2.40/t lower and oil was off 26 points. The weakness in oil was lead by palm oil, which traded to five-month lows.
Canola followed weakness in the veg oil complex, but stood up reasonably well, given that Statscan production was out and significantly higher than the market’s expectations. The market was expecting a 700,000t revision to 20.2Mt, but the actual figure came in at 21.3Mt, marking a 1.8Mt increase on their September estimates. Weakness in the Canadian dollar, helped stem the losses today, but perhaps the focus will switch back to these figures when there is less going on in veg oils.
Aussie cash markets have been mixed, with wheat coming off slightly as Victoria quality becomes more apparent. However feed barley has increased in strength on the back of limited grower selling, prompting nearby China shorts needing entitlement to fill boats. The forecast features very mild rainfall in Vic and NSW (5-10 mmt), which is not expected to cause any significant delays or damage
Source: Lachstock Consulting