Daily market wire 9 May 2017

Lachstock Consulting, May 9, 2017

Overnight markets:

Lower for grains and oilseeds.

  • CBOT Wheat down -8.75c to 433.5c,
  • Kansas wheat down -5.75c to 444.25c,
  • Corn down -4.75c to 366c,
  • Soybean down -8.25c to 964.75c,
  • Winnipeg Canola down -0.29$C to 525.5$C,
  • Matif canola up 3.25€ to 373.5€.
  • The Dow Jones up 5.34 to 21012.28,
  • Crude Oil up 0.28c to 46.5c,
  • AUD down to 0.738c,
  • CAD up to 1.369c, (AUDCAD 1.011)
  • EUR up to 1.092c (AUDEUR 0.675).


Wheat suffered losses as the Commitment of Traders (COT) report, out after the close on Friday, revealed a large reduction in the short position. With the COT reduced, the emphasis on damage from last week’s weather is reduced; hence the lack of dialogue overnight. Planting progress is thought to have increased for the spring wheat crop, which was causing concerns, keeping prices supported and domestic millers nervous. USDA could reduce global wheat production by 12Mmt, but carry-in stocks are in abundance, which should provide a cushion for this reduction.


Soybeans were lower, as limited Chinese demand and South American harvest pressure weighed on futures. The USDA report out Wednesday US time will provide further clarification over new-crop acres and yield potential. Chinese production is expected to grow 9pc, which makes sense considering their large import program and price signals. Futures are not showing anything from a technical perspective.  With ranges relatively tight, the USDA report should provide a catalyst for some more exciting trade.


Canola traded flat to higher, depending on the contract month; July was close to unchanged, while November rallied $2.40 to forge a new monthly high. Seeding progress has begun in the prairies after weather delays last week. Production in China is expected to drop 2pc this year, which might ignite further demand as the season progresses.


Corn suffered losses as technical selling, as well as the impact of improved weather conditions, weighed on the market. Warm dry conditions this week are expected to accelerate planting, which should see the crop progress and get in on time. If this threat is removed from the market, then it will be forced to look at demand, of which there is little at present. Old-crop stocks remain large, and the market is not expecting any bullish surprises in Wednesday’s USDA report.


Rain is forecast for WA’s southeastern cropping areas which are due for a timely top-up. The remainder of the country is looking dry, which will start to be reflected in new-crop basis levels, particularly for canola. Nothing exciting from an old-crop cash-market perspective, despite a weakening AUD.

Source: Lachstock Consulting



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