Markets

Daily market wire 9 April 2018

Lachstock Consulting, April 9, 2018

Friday’s futures markets

 

  • CBOT wheat up 7.5c to 472.25c,
  • Kansas wheat up 8.25c to 506.75c,
  • Corn down 1c to 388.5c,
  • Soybean up 2.5c to 1033.75c,
  • Winnipeg Canola up 2.80$C to 531.8$C,
  • Matif canola unchanged at 352.5€.
  • The Dow Jones down -572.46 to 23,932.76,
  • Crude Oil down 1.48c to $US62.06 per barrel,
  • AUD down to 0.767c,
  • CAD down to 1.27c, (AUDCAD 0.979) and the
  • EUR up to 1.227c (AUDEUR 0.624).

Wheat

Wheat caught a bid as unfavourable weather conditions continued to affect yield potential in winter wheats and planting potential in the spring wheats. Implied volatility in May Soft Red Winter (SRW) wheat futures went out at a whopping 30.125 per cent (pc).

Cold and wet conditions are making it impossible for spring wheat to achieve the USDA’s forecast increased planted area; Minneapolis futures finished up US17.5c/bu.

Looking ahead this week and the forecast looks dry for Hard Red Winter (HRW) wheat areas, April is a critical month for the HRW crop and rainfall so far is unlikely to prevent further yield declines.

In Europe, Matif wheat finished with slight gains while Russian free on board (fob) values were unchanged.

The weekly Commitment of Traders report (COT) had the weekly change in short position contracts in SRW go to 74,600 from 75,100 and long-positions in HRW to 16,100 contracts from 18,800.

Soybeans

Soybeans overcame further political pressure to finish fractions higher. The Trump government raised the tariff stakes again, stating that they would consider taxing an additional US$100billion worth of Chinese goods.

Bean export inspections were solid, with 130,000t going to Mexico, whilst 458,000t went to “unknown” which the market suspects is China as traders push to get business on before the tariff deadline.

The tariff influence is becoming less compelling, given that the SnD is not changed, just its composition.

Soymeal was up $2.70/t, while soyoil finished down 25points.

The Commitment of Traders report had funds +144,000 contracts from 127,400 previous week.

South American production remains an ongoing concern, with Argy estimates continuing to decline.

Corn

Corn followed price action in beans, after trading lower in response to the tariff announcement, prices managing to recover most of their losses in a resilient session.

The weaker close was attributed to market on close selling, corn was trading higher towards the end of the session as the market pencilled in sharp declines in old crop stocks and prices in the risk of lower planted acres.

A 100,000t flash sale of corn was announced to Egypt.

The COT came in +178,500 contracts from 123,500.

Australia

Aussie markets found strong bids in cereals last week, thanks to ongoing dryness, which raised concerns for new crop, prompting consumers to increase some coverage.

Old crop markets in the north shifted approximately A$10/t last week.

The 8-day forecast is showing potential for 10-15 mm in some Victorian and NSW cropping regions, though it doesn’t appear to significantly penetrate the key production region.

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