No deliveries against the March canola contract Friday, open interest at 2,718 contracts, down 50 from Thursday’s delivery
Wheat finishes the week on a positive note, just a one day shot?
US wheat futures finished the week higher on Friday which saw CBOT May + 13.50c and KC May which had the biggest reversal from Thursday’s selloff, closing +21.00c. Matif on the other hand closed the session lower again (6th consecutive lower close) as optimism over the grain deal increases and new crop draws closer.
Russia and the UN are set for renewed talks Friday over the grain corridor extension which at present has an expiry date of March 18. Russia has continuously reiterated current sanctions are still impeding food and fertilizer exports.
South Korea booked 125k of EU FW for Sep arrival at a price of $305-310/mt CFR.
Aussie wheat prices also came under pressure LW with ASW sub $320 and APW1 offers reducing as low as $340/mt.
The grains are lower across the board this morning as the market deals with global economic concerns.
California regulators shut down Silicon Valley Bank on Friday after the bank failed to raise capital. SVB is now under the control of the U.S. Federal Deposit Insurance Corporation. This is the second largest bank failure in U.S. history and the largest since 2008. SVB’s failure can be attributed to its links to the tech industry. Customers with less than $250,000 in the bank are protected by FDIC insurance. Regulators are looking for a quick buyer for the bank. The ripple effect of the failure is being felt around the world. On Sunday, US Treasury Secretary Janet Yellen said the government would not bail out SVB.
U.S. banks lost over $100 billion in value late last week while European banks lost $50 billion according to Reuters calculations.
Silicon Valley Bank was ranked as the 16th largest lender in the U.S. as of the end of 2022 with $209 billion in assets. While the bank tried to raise capital amid fleeing deposits, they lost $1.8 billion on Treasury bonds whose value dropped due to Fed rate hikes. Silicon Valley Bank will reopen today and all insured depositors (less than $250,000) will have access to their insured deposits. According to the FDIC, 89% of the banks’ $175 billion in deposits were uninsured at the end of 2022. S&P Global Ratings, a credit rating agency, said on Friday, it expects SVB to file bankruptcy due to its liabilities.
The Institute for the Study of War says Russia appears to be stalled in its advance to take over the Ukraine city of Bakhmut. There is no evidence Russia has been able to make any progress.
Canola continued lower on carryover selling producing bearish chart signals and a ramp-up in fund/managed money selling. Panic liquidation selling was also likely friday, with May taking out its September low and ultimately taking a run at the low on the weekly chart at $766.
Mpls wheat -6
KC wheat -11
Chic wheat -10
Matif wheat +2
Soybean oil -115