Stronger for grains, mixed for oilseeds.
- CBOT wheat up 14.25c to 460.5c,
- Kansas wheat up 12c to 481c,
- Corn up 1.75c to 365.25c,
- Soybeans down 3.5c to 994.25c,
- Winnipeg canola down C$1.10 to $504.4,
- Matif canola up €1.75 to €350.
- Dow Jones up 100.09 to 25012.86,
- Crude oil down US$1.55c to $61.84 per barrel,
- AUD down to 0.782c,
- CAD up to 1.256c (AUDCAD 0.983),
- EUR down to 1.227c (AUDEUR 0.637).
Wheat took off, with funds hitting the escape button on short Soft Red Winter (SRW) positions, and adding to Hard Red Winter longs.
Implied volatility in March SRW went out at 20.85 per cent.
Conditions in US winter wheat areas are not improving at an appropriate rate, with the limited moisture received, and what is forecast not significant enough to warrant a tangible turnaround.
Another catalyst for funds was fears of cheap volatility being favored by money exiting other investments. The short wheat volatility play has worked for a long time, but with macro uncertainty forcing investment managers to rethink where they park their cash, maybe wheat is not such a bad prospect.
USDA’s World Agricultural and Supply and Demand Estimates (WASDE) are due out Friday, and the focus will mainly be on South American production.
Wheat remains a weather and order-flow story for now.
Soybeans were off slightly after yesterday’s run, with Argentinian weather featuring the possibility of 15-25 millimetres of rain in the longer-term forecast.
There is a school of thought that even minor showers will not be sufficient to reverse production damage.
With CONAB out tonight to update Brazilian production estimates, and a WASDE report out Friday, there will be a lot of new fundamental fodder for the market to digest.
Soymeal was US$3.70/t higher, while soy oil was 60 points lower.
Canola followed weakness in outside markets to finish with slight losses. The CAD was slightly lower, but the soft tone in vegetable oils prevented a positive close.