Latest CRM Commentary

May-17 LIFFE Feed wheat tests £149/T resistance once again

Cereals

  • Quiet start to the week for UK LIFFE Feed wheat futures prices with about 160 contracts traded, 10 on  Nov-18 expiry. After testing, its £149/T resistance level in early afternoon, the May-17 contract could not keep momentum despite a decline in the Sterling against both the euro and the US Dollar.
  • Euronext milling wheat was treading water today except on the Mar-17 contract which expires on Friday and fell more than 2% or 3.75€/T, touching a one-week low.
  • The persistence of dry conditions across the US Plains and hopes for more exports continues to lend support to the US wheat markets, particularly Chicago. As a result, the May-17 Minneapolis/Chicago wheat spread has dropped to its lowest since early November 2016.
  • According to UkrAgroConsult, more than 82% and 72% of the Ukrainian winter wheat/barley are in ‘Satisfactory/Good’ condition.
  • After harvesting what could be qualified as the ‘crop of the century’, Australia could see a sharp reduction in its wheat production in 2017/18. According to the government, the output could fall 32% to ~24MlnT vs ~35.2MlnT in 2016/17 mainly due to lower yields as the planted area will only drop 1% from last year.
  • The China National Grain and Oils Information Center has reduced its country’s 2016/17 corn import requirements forecast to 1MlnT vs 2MlnT previously and 3MlnT for the USDA.
  • According to last week’s CFTC data, money managers cut their net long position by 10K contracts to 82K in CBOT corn and increased their net short position in CBOT wheat by 28K contracts (the most since mid-April 2016) to 55K [See Chart of the Day].
  • South Korea has purchased about 60KT of feed wheat.

The Mar-17 Euronext maize contract expired today.

Oilseeds

  • In the wake of higher palm oil prices and a weakening euro, Euronext rapeseed prices started the week on the front foot across the board but settled off the highs as the US soybean complex lost momentum in late afternoon.
  • Strategie Grains has left its 2017/18 EU rapeseed production estimate virtually unchanged from last month at 21.58MlnT and compared to 20.26MlnT last year.
  • ABARES pegged the 2017/18 Australian canola production at 3.69MlnT (-11% year on year).
  • After gaining more than c$8/bu at one point during the session, CBOT soybeans prices retreated and were set to finish close to equilibrium level.
  • The Brazilian soybean harvest is estimated to be 78% complete in the top producing state of Mato Grosso vs 65% LY. Nationally, the harvest is 40% complete with very good yields being reported.
  • Last week’s CFTC data:
    • CBOT soybean: money managers have cut their net long position by more than 22.7K contracts to 131K;
    • CBOT soymeal: money managers have cut their net long position by nearly 3K contracts to ~70.5K;
    • CBOT soy oil: for a second consecutive week, money managers have cut their net long position; -17.8K contracts to 27K, the lowest since early August 2016.

Chart of the Day: Managed Money – CBOT Wheat / Corn / Soybean

Futures & Options prices