Overview of futures markets:
Lower for grains, mixed for oilseeds.
- CBOT Wheat was down -8.5c to 427.5c,
- Kansas wheat down -6.25c to 457c,
- corn down -4.25c to 365.25c,
- soybeans down -3.75c to 1011c,
- Winnipeg canola up 3.60$C to 530.2$C,
- Matif canola down 0€ to 415.75€.
- The Dow Jones down -69.02 to 20855.73 ,
- Crude Oil down -2.96c to 50.18c,
- AUD down to 0.7526c,
- CAD up to 1.349c, (AUDCAD 1.015)
- EUR down to 1.053c (AUDEUR 0.7139).
USD strength , low volume trade, larger south American production were the catalysts for the selloff in beans with limited fundamental inputs to encourage active buying ahead of tomorrow’s USDA Report. Despite the lower close, soybeans remain resilient, respecting recent technical support levels.
Canola stronger despite bean weakness, following stronger palm oil prices and a weaker CAD.
Strength in the USD did not help wheat which was under pressure from corn and bean weakness. Dry conditions remain present on the plains, with wildfires breaking out. Despite strong production potential this year the US Ag Attache is forecasting ongoing imports of wheat into India, as they rebuild stock levels.
This could lead to increased demand for Aussie wheat in Q2, locally we have seen hints of this with some BHC’s no longer able to offer methyl bromide fumigation services from April to May, suggesting some business might be on the books already.
Corn had a reasonably stagnant session trading lower on reduced volumes. Repositioning was present as funds quit long positions and switched into beans. Ethanol data, despite being lower than last week is still historically high and should help reduce the carry burden greater than the USDA is currently expecting.
The AUD traded lower again overnight, as China posted its first trade deficit since 2014. The failure to close above .76 suggests technical weakness, so more downside could be on the cards.
Weather wise QLD and Northern/Central NSW have good rainfall forecast in the next 8 days, which would be a welcome contribution to the parched moisture profile, and should help influence new crop decision making.
Source: Lachstock Consulting