Markets

Daily market wire 8 May 2017

Lachstock Consulting, May 8, 2017

Overnight markets:

Stronger for grains, mixed for oilseeds.

  • CBOT Wheat up 4.5c to 442.25c,
  • Kansas wheat up 5.5c to 450c,
  • Corn up 4.25c to 370.75c,
  • Soybean down -1.25c to 973c,
  • Winnipeg Canola up 3$C to 525.8$C,
  • Matif canola up 4.25€ to 370.25€.
  • The Dow Jones up 55.46 to 21006.94,
  • Crude Oil up 0.949c to 46.47c,
  • AUD down to 0.741c,
  • CAD up to 1.366c, (AUDCAD 1.011)
  • EUR up to 1.100c (AUDEUR 0.673).

Wheat

Wheat stronger as market awaits the actual affects of recent weather damage. Access has been difficult with snow cover and wet weather, so they really need to see things dry out before they can make an accurate assessment. Statscan March 31 stocks were below market expectations at 16.6Mt vs. 17.2Mt, which added a positive tone to things. Weather forecast suggests more cold wet conditions in SRW areas, while frost risk concerns for early this week. Globally, there are parts of Russia that need more moisture, while the French crop managed to get some timely rainfall. In spite of this, French crop conditions deteriorated down 4 per cent (pc) to 74pc good to excellent. The Commitment of Traders (COT) showed a marked decrease in the wheat short at -150,900 contracts vs. -189,400 last week.

Soybeans

Soybeans slightly lower, on sluggish Chinese demand. Things were looking strong early with a new monthly high reached, but the reality of South American crops was realised by grower selling, which pressured futures. Planting delays remain an issue as cold, wet conditions limit access to paddocks. Forecast rainfall for Argentina is expected to cause further harvest days there. The COT had the bean short at -70,400 contracts vs. 75,300 last week.

Canola

Canola stronger, following strength in soy oil, which has found new support from progress in US government policy. It is not done yet, but the US government made progress on its move to enforce an import tariff on Indonesian and Argentinian biodiesel. This should see a reasonable demand increase for US oilseeds. Statscan came out with no major surprises in their March 31 stocks numbers at 6.66Mt vs. 8.57Mt last year. Cash markets in Canada continue to show strength given tightness in old-crop; nearby shorts are having to increase basis levels as it becomes harder and harder to buy/find.

Corn

The corn market decided to focus on planting delays, which helped to forge a higher close. Weather conditions continue to be cold and wet which is not helping anything.  Recent conditions will have done enough damage to force replanting in parts. The forecast needs to improve ASAP to speed progress, given that we are now getting very close to the May 15 deadline, which would see corn acres lost to oilseeds. China’s government auction for old-crop corn stocks was met with better demand than expected, with approximately 2Mt sold at US $206.6/t; another auction is expected this Tuesday. Corn COT reduced their short to -19,800 contracts from -209,900 last week.

Australia

The weather forecast remains dry for the next 8 days, aside from some mild showers in southern WA. This will mount growing concern if we do not see any significant improvement in the next week, as there are some areas of WA and SA which are in need of moisture. Cash markets remains relatively quiet in wheat, while barley is supported. ABS barley exports for March were impressive at 1.27 Mt; at this rate the balance sheet should tighten sooner than expected.

 

Source: Lachstock Consulting

 

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