Markets

Daily Market Wire 1 October 2019

Lachstock Consulting, October 1, 2019
Most markets on Monday settled higher; corn led 4pc higher and crude oil 3 per cent lower.
  • Chicago wheat December contract up 8.5 cents per bushel to 495.75c;
  • Kansas wheat December contract up 7.5c to 415c;
  • Minneapolis wheat December contract down 2.5c to 544.5;
  • MATIF wheat December contract up €0.75 to €174.75;
  • Corn December contract up 16.4c to 388c;
  • Soybeans November contract up 23c to 906c;
  • Winnipeg canola November contract up C$5.50 to $451.30;
  • MATIF rapeseed November contract up €1.25 to €387;
  • Brent crude December contract down $1.89 per barrel to $59.25;
  • Dow Jones index up 96.58 points to 26916.83 points;
  • AUD weakened to US$0.6758;
  • CAD strengthened to $1.3236;
  • EUR weakened to $1.0900;
In the wheat pits Chicago settled up 8.5 usc/bu closing at 495.75usc/bu, Kansas was 7.5 usc/bu higher to settle at 415usc/bu, while Minni softened -2.5 usc/bu to go out at 544.5usc/bu. Corn gained 16.5 usc/bu to go out at 388usc/bu while Beans were up 23 usc/bu to settle at 906usc/bu WCE Canola rallied 5.5 CAD/mt closing at 451.3CAD/mt with Matif Canola finishing higher by 1.25 Eur/mt. In outside markets the Dow Jones gained 96.58 points, Crude was down -1.81 bbl the Aussie was -0.0012 lower to settle at 0.67489, the CAD softened -0.0001 while the EUR fell -0.0042.

Markets and trade

Wheat rallied overnight despite being handed another set of bearish stocks numbers by the USDA.
Corn however changed the game.
Many have been focused on the idea that corn rationed a bunch of demand during its wet planting window and, given spreads to HRW in particular, there was a theory that wheat was displacing corn feeding. Not according to the USDA.
This becomes a reaction to sins of the past as it is evident the USDA had overstated last year’s yield. The compounding effect of this adjustment is not lost on the market – especially given the corn crop is rated at 43pc mature vs the average of 73pc. What does this mean for yield?
Add in a bunch of late season rain and this corn story is very far from over.
There is a long way to go for harvest with only 11pc of the national crop in the bin so far vs 26pc last year.
The October WASDE report to be released on October 10 is increasing in importance.
The fact that the USDA went back and reviewed their old crop guess does suggest the need to be a little more conservative when assessing this year’s extremely late crop.
The corn market remains short – historically short for this time of the year suggesting a complacency that can become a problem should the fundamentals shift.

Australia

Locally markets firmed yesterday, ASX Jan-20 contract rebounded with the bid side going home at $361/t, up $9/t from last week’s lows as the sell-off ran out of steam and a drier, warmer forecast looks to become a reality. Where to from here? The market still is struggling to get a handle on production and, more importantly, the level of consumer cover. Who steps up and buys at harvest? Overnight frosts through the Vic Mallee and down into the northern part of the Western Districts add another level of uncertainty in what is becoming an extremely challenging year.

 

 

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