Markets

Daily Market Wire 8 March 2024

Lachstock Consulting, March 8, 2024

Markets tended firmer as the US Dollar Index eased. The Australian dollar firmed another one percent.

  • Chicago May 2024 wheat down US2.5c/bu to 528.5c/bu;
  • Kansas May 2024 wheat up 18.5c/bu to 574.75c/bu;
  • Minneapolis May 2024 wheat up 9.5c/bu to 654.75c/bu;
  • MATIF wheat May 2024 up €3.50/t to €192/t;
  • Corn May 2024 up 9.25c/bu to 438c/bu;
  • Soybeans May 2024 up 18c/bu to 1166.25c/bu;
  • Winnipeg canola May 2024 up C$6.50/t to $605.40/t;
  • MATIF rapeseed May 2024 up €3.25/t to €425.75/t;
  • ASX March 2024 wheat unchanged at A$316/t;
  • ASX May 2024 wheat unchanged at A$319.50/t;
  • ASX March 2024 barley unchanged at A$298.50/t;
  • ASX May 2024 barley unchanged at A$304.50/t;
  • AUD dollar up 56 points to US$0.6620.

International

US Fed chairman Jerome Powell said last night that rate cuts can and will start this year which promptly weakened the DXY and added a bid to equities. This dovetailed into comments from the European Central Bank President, Christine Lagarde which indicated that the bank may be in a position to ease its policy in June. In a procession of data, the US jobs report comes out tonight with the expectation of 200k new jobs. Fair to say there has been some big misses in the last few releases – indicated by the range on best guesses – 145k to 260k. Conversely, it looks like the Bank of Japan will increase rates for the first time since 2007. 

The disparity in US wheat futures contracts was driven by reports that China cancelled SFW purchases and GASC cancelled its tender – meanwhile, Kansas found a bid, both in relative terms and in structure. 

Not that anyone in the market seems to care, but a bomb went off not far from Odessa, more meaningful given that Zelensky was there with the Greek Prime Minister. 

We have a watch on Brazilian corn conditions, although it seems we are one of the few. Safrinha corn is just over 90pc in the ground with rainfall well behind normal. It is really a April-May type deal but, so far at least, things are looking a little thirsty. 

The March USDA report is historically a non-event. But that’s the thing about surprises… no one expects them… that’s why they are surprises. Tonight’s report is all about South American production – average guess has Argentinian and Brazilian soybean crops at 50.3 million tonnes (Mt) and 152.8Mt respectively versus 50Mt and 156Mt seen in Feb. Argentinian and Brazilian corn is guessed at 55.1Mt and 122.4Mt versus 55Mt and 124mt in Feb. Outside of that, most pre-report estimates are in line with Feb numbers. 

A Bloomberg survey pegs Canadian wheat area to fall 1.4pc.

Australia

To say the Australian market is quiet would be an understatement. With values grinding lower it seems the grower has gone fishing with the trade supplying all of the liquidity. The export pace has been impressive but it’s all about the next tranche of business, no mean feat given the Asian consumer has been sitting back watching the market come to them. It’s worth noting that, on current export estimates our ending stock number is “tight like a tiger”. China has front-ended both wheat and barley, so this leaves our usual off-takers to fight over the rest. However, with the Russian wet blanket weighing on global values, it is becoming a game of chicken. 

SA and Vic are going to see some summer over the next week with a decent run of heat.

 

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