Daily market wire 9 October 2017

Lachstock Consulting, October 9, 2017

Overnight markets:

Higher for grains and oilseeds

  • CBOT Wheat was up 2.75c to 443.5c,
  • Kansas wheat up 2.5c to 436.75c,
  • corn up 0.5c to 350c,
  • Soybean up 4c to 983c,
  • Winnipeg Canola up 1.40$C to 502.1$C,
  • Matif canola down -0.75€ to 369.25€.
  • The Dow Jones down -1.72 to 22773.67,
  • Crude Oil down -1.54c to US$49.25,
  • AUD up to 0.777c,
  • CAD up to 1.253c, (AUDCAD 0.973)
  • EUR up to 1.172c (AUDEUR 0.662).


Winter wheats bounced off technical lows to finish with mild gains. Spring wheat was the leader, finishing with US8cents/bushel gains as export demand for Canadian wheat kept the US domestic market on its toes. Implied volatility in December Soft Red Winter (SRW) wheat futures went out at 16 per cent. Cash prices in Russia and the Ukraine continued to stabilise which prevented other markets from independently declining. The weekly Committment of Traders (COT) report had SRW at -86,700  vs. -94,600 contracts, Hard Red Winter wheat at +2,400 vs. +5,900 and spring wheat at +3,800 vs. +2,500 contracts.


Beans were under pressure early, before bouncing off technical support to manage a higher close. Yield forecasts are declining slightly for the US crop, which is combining with expectations of post holiday export buying from China to keep an active bid presence. South American production concerns are also helping to keep beans supported. The COT had the bean position -170,600 vs. -159,800 contracts last week.


Canola finished stronger again, continuing its momentum from recent sessions. Canadian export and crush demand is progressing at record pace, which is supporting nearby pricing, as exporters and crushers cover nearby requirements.


Corn finished with just above unchanged, with the market looking to South American production for direction. Argentina’s corn planting pace has been delayed by excessive moisture and is now its lowest level since 2013, at 17pc complete vs. 27pc for the same time last year. Hot and dry conditions continue in Brazil, where La Nina chatter is mounting. In positive demand news, the USDA announced a private sale of 195,000t to unknown. The weekly COT was -170,600 vs. -159,800 contracts and is now at sizeable levels where a bullish catalyst could spark a short covering rally.


Last weeks rainfall featured 25-50mm for a good portion of Qld, though it seems to have missed a good portion of sorghum area on the Darling Downs. The 8-day forecast features more rainfall for Qld and NNSW, which will delay winter crop harvest and encourage summer crop plantings. In Victoria 10-15mm is expected in the north-western areas of the state that are in the most need. If achieved this will stabilise the crop and prevent further downside, by boosting the moisture profile. Cash markets were quite whippy last week, particularly in the north where the weather forecast offered the greatest variability, which transpired into large daily moves in Downs market pricing.


Source: Lachstock Consulting


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