20/1/25 Prices

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Corn and soybean futures at Chicago both clawed back some of the previous sessions losses. Soft red winter wheat futures at Chicago closed in the green after poor session yesterday. Week on week SRWW March futures gained 8c/bu thanks mostly to spill over support from the sharply higher corn market. There were no significant fundamental drivers for wheat apart from speculation that higher corn values may see an increase in wheat in some rations. The current US wheat / corn spread is about 57c/bu nearby, which does tend to support that speculation a little. In order to see 600c/bu wheat again we will most likely need to see sustained and stronger corn values in the US though.
The dry weather in Argentina is getting good attention. The forecast of 10-30mm for much of the major growing regions of Argentina improved further overnight. Rainfall expected to fall towards the end of next week is now predicted to be as much as 75mm in parts of Santa Fe province.

Us soybean futures were higher last night. The strength in soybeans was supported by better closes for palm oil in the outer months, nearby palm was actually a bit lower. The better bean close rolled across to both ICE canola futures and Winnipeg and Paris rapeseed futures, both closing with gains between AUD$8.00 and AUD$10.00 compared to yesterdays conversions.

The AUD is back under 62c this morning. After falling through the early stages of the session, down as low as 61.68, the AUD made a sharp recovery to 62.23 before grinding lower for the balance of the session, slipping back below 62c in the final hour or so. The AUD found support from news that Chinese GDP expanded 5%, a little better than the 4.6% predicted. The market continues to consider what a reduction the RBA rate would mean to the AUD and are reluctant to push the AUD too high ahead of next months RBA decision.

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