Using accurate data to minimise your risk in the commodity market
Who we are
Using accurate research and market analysis, we take the complexity and noise out of the commodity market. We tailor our commodity advice to your personal requirements, setting reasonable personal targets to increase profitability but also reduce risk. Opinions are great, but we use the data!
Who you are
We adapt our commodity marketing services to meet your needs within the grain industry. Whether you are a corporate business looking to improve business strategies, a farmer who grows grain or a dairy farmer looking to lower your outgoing costs, we have a solution for you. Through market analysis we aim to reduce cost, reduce risk and thus improve your margins.
Minimise your risk whilst maximising your return
Lachstock was founded in 2007 a result of the deregulation of the grain market. The grain market experienced changes to procurement, distribution, product release and an increase in grain price volatility. With more participants and products hitting the market the buying and selling of grain became a complex process.
Lachstock provides services to both corporate clients and farmers. Tailoring our solutions to your needs.
Lachstock uses analytical research rather than a salesperson with a silver tongue. Taking the complexity and noise out of the market whilst tailoring advice to your personal requirements. We analyse the prior data and set reasonable personal targets to increase profitability but also reduce risk.
Lachstock Consulting holds an AFSL #320 562 to provide advice to wholesale clients on derivatives and foreign exchange.
Commodity Research and Advice
Example Canola Supply & Demand Report
27th May 2020
Canola Take Aways:
- No changes to old crop Australian S&D
- New crop WA production down 80kmt (as flagged in last report) to 1.375mmt, NSW up 55kmt to 507kmt based on switches out of Barley, SA unchanged and VIC up 25kmt to 599kmt. Total Australian number at unchanged at 2.79mmt
- Recent rain beneficial to WA, however it followed a sand blasting wind that may have damaged some crops. To late for extra acres to go in
- Canadian export pace remains strong, our 19/20 export figure is unchanged @ 9.65mmt
- Meng Extradition “double-criminality” ruling handed down tomorrow, Wednesday, Canada time
- Canadian 20/21 production reduced further to reflect largely unchanged area from StatsCan. Production now 19.4mmt (-400kmt). Export figure increased to 300kmt, at record high at 11.5mmt. Canadian crush reduced 500kmt due to recent down-turn in margins
- Again we have an “unsolvable” type export number from Canada to the EU at 3mmt
- EU 19/20 S&D unchanged. 20/21 production reduced further to 16.4mmt (-500kmt). Crush reduced 200kmt to 23mmt. Margins remain strong and recovery in energy and biodiesel is supportive. Imports record at 7mmt
- Ukraine 20/21 production unchanged at 2.9mmt
No changes required to the old crop situation, however we did tinker with new crop. As flagged in the last report, the dry weather in WA put around 75kmt of crop at risk of not being sown. Whilst WA received much needed rain over the past week, it was to late to encourage those canola acres into the ground. Therefore, we reduced WA by 80kmt equivalent.
The other main driver for Australian markets has been the recent decision by China to whop a big tariff on barley imports. This sent barley prices plummeting and caused enough noise for some farmers to switch out of barley. However, for the most part, it was to late for those acres to go back into canola. The exceptions being some minor switches in VIC and a more pronounced move in NSW. In NSW we lifted production by 55kmt as a result.
More to talk about on the global front for sure. The first order of business is the Meng extradition case, where on Wednesday the Canadian court will hand down its “double criminality” verdict. This step is to determine if the case would have indeed been a crime in Canada, due to the slightly different laws between Canada and the USA around Iranian sanctions in particular. The expectation is that it will be deemed a crime and the circus will continue, further delaying any talk of China-Canada canola imports being fully re-instated. However, on the chance that the case is dismissed the market will likely view it as friendly. Even if it is unlikely for trade to pick up immediately.
Other news in Canada shows a continuation of the rapid export pace, as such we are confident in reaching our marketing year number and have left it unchanged. StatsCan came out during the month and pegged canola acres largely unchanged YoY, leading to us reducing our estimates. Planting pace is mixed around the country, but their are no major concerns at this stage. On the demand side for new crop we cut crush due to the marked decline in margins, but increased exports to Europe as we look for a solution to balance the ever tightening EBS situation.
Across to the EU ….
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