Markets

Daily Market Wire 8 October 2018

Lachstock Consulting, October 8, 2018

Higher for grains and mixed for oilseeds.

  • CBOT Wheat up 3 to 521,
  • Kansas wheat up 2 to 524.25
  • Spring Wheat up 1.5 to 591.25.
  • CBOT Corn up 0.75 to 368.25
  • Matif Corn unchanged at  €174
  • Soybeans up 9.75 to 869
  • Winnipeg Canola up 2.3 to 501.3
  • Matif Canola down €-0.25 to €376.75
  • Dow Jones down -180.43 to 26447.05
  • Crude oil up 0.01 to 74.26
  • AUD down to 0.704
  • CAD down to 0.77261
  • EUR was unchanged at 1.151

Wheat

Wheat managed a slightly higher close to end the week up US12c/bu. Implied volatility in Dec Soft Red Winter wheat futures finished at 22pc. Matif wheat was up €0.75/t to €203.50/w, Black Sea Wheat was down $0.50/t to $248.5/t fob and the Ruble was up 0.62pc. There was no fresh news and traded volume was on the low side as the market is still grappling with the same problems: Russian export pace; Australian production woes and the question of when US wheat will be forced to take out a large portion of world demand. The The Commitment of Traders Report (COT) had SRW at -41,900 from -38,000 contracts short, HRW +17,300 from +21,100 contracts long. This week’s WASDE should provide some direction as the USDA will be forced to address the 10-15Mt they have sitting in the major wheat exporters.

Corn

Corn finished fractions higher, overcoming early selling pressure to peg its highest close in a month. It has been slowly progressing higher since overcoming large yield estimates and an early wave of grower selling which has now vanished, combining with harvest delays to scare shorts into getting out. The Corn COT came in -95,300 from -146,500 contracts short.

Soybeans

Beans rallied on harvest delays, strong macros and some minor optimism for China US relationships. Economic strength in the US has led to rising interest rates, prompting strength in the US dollar. Their unemployment rate for the month of September came in at the lowest level since December 1969. The COT had funds -100,300 from -114,400 contracts last week. Soybean meal was up $7.40/t to $319.60/t while soy oil was down -0.37c/lb to 27.8c/lb. This week the market will look at the October WASDE report which is out on the 11th.

Canola

Canola was mixed across the two contracts with Winnipeg futures gaining support from a weaker currency, stronger vegoil prices and ongoing harvest concerns due to untimely in crop moisture. Matif futures finished fractions lower in a low volume session as traders await clarity on the Canadian and Australian situations.

Australia

Aussie markets finished the week on a softer note as rainfall in NSW and WA helped the bid side of the market to ease back, letting WA grower selling set the tone. The 8-day forecast has nothing of substance for WA, but very promising potential for the east coast. Vic is looking for 15-25mm with reasonable coverage, while NSW and QLD cropping areas are looking at similar amounts. It’s all too late for winter crop but could help to ease prices if consumers back off on ideas of greater summer crop potential.

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