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Daily market wire 9 January 2018

by Lachstock Consulting, 09 January 2018

Overnight futures markets:

Lower for grains and oilseeds.

  • CBOT wheat  down -3c to 427.75c,
  • Kansas wheat down -4.25c to 433.25c,
  • corn down -4c to 347.25c,
  • Soybean down -4c to 966.75c,
  • Winnipeg Canola down -1.80$C to 496.4$C,
  • Matif canola down -0.25€ to 358€.
  • The Dow Jones down -1.65 to 25294.21,
  • Crude Oil up 0.27c to $US61.71 per barrel,
  • AUD down to 0.783c,
  • CAD up to 1.241c, (AUDCAD 0.973)
  • EUR down to 1.196c (AUDEUR 0.655).

Wheat

Wheat finished lower again, now for the third day in a row, sellers’ sentiment prevailing along with a chance of some, limited, moisture in the US southern plains.

Implied volatility was lower, heading out at 18.76pc in March Soft Red Winter wheat futures.

Matif futures were fractions lower, while Russian values were stronger again, up US$1/t to $193/t free on board for 12.5pc protein wheat. Southern Russia has limited snow cover, so the cold temperature currently forecast is prompting some new-crop concerns.

In demand news Algeria purchased 555,000t of wheat at $209-214/t cost and freight, and we will get the results of Morocco’s tender tomorrow.

Corn

Corn sold off in sympathy with wheat and beans, as well as speculation that last year’s US yields will be increased in Fridays USDA report. Today’s session almost reached a US5c/bu trading range, which is impressive for corn, given its recent lack of volatility. Weekly export sales came in at 849,000t, up 17pc on the previous week.

Soybeans

Weekly export inspections in beans came in at 1.183 million tonnes, which was in the middle of expectations. However reasonable growing conditions in central and northern Brazil have combined with a moderate improvement in the Argentine forecast to drive prices lower. Meal was down US40c/t, while soy oil was down 22 points. Brazil’s official agricultural forecaster, CONAB, will update its production figures in a report out this Thursday, which combines with the USDA report on Friday to feed the market with a lot of fresh input. The market is expecting a bearish to neutral outcome from the CONAB report.

Canola

Canola lower again with Winnipeg losing ground on Matif. Today’s weakness was in sympathy with outside market weakness, as well as the sustained strength of the Canadian dollar. The Canadian market needs to see some good Chinese demand to maintain its recent uptrend.

Australia

The Aussie market remains hamstrung by the stronger currency and the lack of direction in futures, which in not encouraging any bold movements.

Grower selling is limited and traders are unwilling to pay up for tonnes in export states. Our wheat price has done a lot of work relative to Russian values, so we should expect to see some demand increases, once grower liquidity picks up and exporters have confidence in accumulating a cargo at their sales price. For this we need to see the AUD break or CBOT to keep pushing through moving averages.

Source: Lachstock Consulting

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