Overnight futures markets

 

Mixed for grains, higher for oilseeds.

• CBOT wheat up 3c to 514.5c,
• Kansas wheat down -1.25c to 538.25c,
• Corn up 2.5c to 403.25c,
• Soybean up 8.75c to 1020.25c,
• Winnipeg Canola up 3.60$C to 528.5$C, and
• Matif Canola up 0.75€ to 355.25€,
• The Dow Jones up 2.88 to 24360.21,
• Crude Oil down -0.689c to $US70.04 per barrel,
• AUD down to 0.745c,
• CAD up to 1.294c, (AUDCAD 0.964) and the
• EUR down to 1.186c (AUDEUR 0.627).

Wheat

Wheat finished with slight gains in a mixed session that featured an average range.

Improved crop conditions and a reasonable moisture forecast applied some early pressure, before some speculative buying was uncovered ahead of Thursday’s USDA report.

Implied volatility in July SRW went out at 27.5%. Spring wheat is finding more of a story, with excessive moisture concerns building for parts of the northern plains, which could further delay seeding pace.

In Europe Matif futures were up 1.75€, thanks to a weaker currency.

Russian prices were unchanged, with forecasts still holding decent moisture in the 10-day forecast.

In export news, the Jordan wheat tender went through at $227 for August shipment. While Iraq announced another tender for 50kmt of Aussie, US or Canadian wheat, Australia got the last of this business, so it will be interesting to see if they are successful again.

 

Corn

Corn finished with mild gains in a quiet low ranging session.

President Trump backed a change in law, that would see RIN’s (Renewable Identification Number) allowed on exported ethanol out of the US, which would encourage greater production and use of corn.

The market is expecting the WASDE report for global corn to show ending stocks of 41.25mmt vs 55.4mmt last year.

 

Soybeans

Soybeans finished higher, bouncing off technical support, thanks to further progression in US/China trade negotiations. The US president and Chinese President are in discussions about a trade resolution and China’s Vice Premiere will visit the US next week.

All eyes are on the USDA’s report which will come out Thursday night AEST, with the market expecting them to reduce 17/18 carryout down 0.7% to 546mbu, while only reducing 18/19 carryout -15mbu to 553mbu.

Soymeal was up $3.40 per tonne, while soy oil was down 18 points.

The logistics problems in Argentina and smaller production make for underlying support in meal, which we saw in today’s session.

Canola

Canola followed strength in beans, with the nearby contracts increasing over new crop thanks to improving crush margins.

Support was also uncovered from weakness in the dollar, which fell 0.54%.

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Australia

The Aussie forecast looks unchanged with 5-15mm forecast for some cropping regions in Victoria, while the longer-term forecast remains pretty dry.

Cash prices will gain support today from the weaker Aussie dollar, which fell below .75 to lows not seen since May last year.

New crop in wheat and barley has fallen with rainfall and a drop in futures, but old crop remains well supported.

Dryness concerns are now building for parts of WA, which has seen a pretty dry start, with limited moisture in any of the near-term forecasts.

 

Source: Lachstock Consulting.