US corn, wheat and soybean futures all fell apart last night, the board closing in the sea of red. Soybeans were the biggest looser, shedding 19c/bu in the January slot. This had the expected impact on both Paris rapeseed futures and Winnipeg canola. The later already pretty beaten up over the whole China anti dumping case yet to confirmed by China against Canada.
Comparing yesterdays conversion of Paris and Winnipeg values back to AUD per tone with this mornings conversion shows the sharply lower AUD has created a little buffer but it would had to have been a big move in the AUD to buffer all of it. The Feb slot at Paris comparison in back around AUD$8.33/t, the Winnipeg Jan conversion comparison is back around AUD$17.28/t. So not painting a great picture for local canola bids here come Monday.
In the US outside market weakness also spilled into grains. Lower energy futures, crude and diesel fuel values also having significant falls. Wheat had been performing OK up until yesterday, it too had significant losses last night. The day to day conversion comparison for SRWW was helped by the weaker AUD, turning a possible AUD$4.27 move lower into a possible AUD$1.01 move lower. Those that increased local prices on the back of better basis yesterday may have second thought about that move this morning, unless the move was all related to predicting the AUD move overnight.
As expected high prices often fix high prices, US weekly wheat export sales volume was 17% below the 4 week average, coming in just marginally better than the lowest trade estimate prior to report release.
The CFTC report did show a reduction in managed money shorts at Chicago, as expected. Managed money backing out of roughly 10% of their SRWW wheat shorts. Both spring and HRWW shorts were also reduced. Their corn short also saw a significant change in estimated volume, more than -10%, mind you the net short is still very significant. I’d imagine if they smell blood they’ll pile back in.
The next USDA WASDE report is due out on the 12th, the 13th our time, that’s next Friday.