Markets

Daily Market Wire 8 October 2019

Lachstock Consulting, October 8, 2019
US markets on Monday settled mixed; EU and Canadian firmer.
  • Chicago wheat December contract down 1.25 cents per bushel to 489.25c;
  • Kansas wheat December contract down 1.75c to 402.25c;
  • Minneapolis wheat December contract up 2.5c to 538.5;
  • MATIF wheat December contract up €0.25 to €176.50;
  • Corn December contract up 2.5c to 387c;
  • Soybeans November contract down 1c to 915.25c;
  • Winnipeg canola November contract up C$1.90 to $462.60;
  • MATIF rapeseed November contract up €1 to €387;
  • Brent crude December contract down $0.02 per barrel to $58.35;
  • Dow Jones index down 95.70 points to 26478.02 points;
  • AUD weakened to US$0.6731;
  • CAD weakened to $1.3304;
  • EUR weakened to $1.0970;
In the wheat pits Chicago settled down -1.25 usc/bu closing at 489.25usc/bu, Kansas was -1.75 usc/bu lower to settle at 402.25usc/bu, while Minni rallied 2.5 usc/bu to go out at 538.5usc/bu. Corn gained 2.5 usc/bu to go out at 387usc/bu while Beans were down -1 usc/bu to settle at 915.25usc/bu WCE Canola rallied 1.9 CAD/mt closing at 462.6CAD/mt with Matif Canola finishing higher by 1 Eur/mt. In outside markets the Dow Jones fell -95.7 points, Crude was down -0.03 bbl the Aussie was -0.0037 lower to settle at 0.67307, the CAD rallied 0.0003 while the EUR fell -0.0006 Markets slowly drifting into the USDA report.

Markets and trade

The focus on corn and bean yields is certainly the driver but there could also be some interesting points in the wheat balances.

Global ending stocks will have to deal with a lower southern hemisphere number along with speculation around wheat feeding.

While the US has been essentially rationing corn demand via higher prices, the South Americans have been discounting to clear.

The European market has been mixed with large Black Sea corn production offsetting some EU shortfalls – so there will be plenty of debate leading into Thursday’s reports.

From a weather perspective Argentina and Australia continue to be the main concern. From an NDVI perspective Argentina is extremely concerning – Buenos Aires state, which produces 40-50pc of Argentina’s wheat, is at the lower end of the historical range and will certainly be impacting production.

The USDA currently has Argentina in for 20.5 million tonnes (Mt) and Australia at 19Mt production (16.3Mt and 23.2Mt respective 5yr avg) which will almost certainly be above the reality today.

While still not creating a global problem as such, this is certainly a reason for the global market to find support. Egypt’s wheat tender tonight will be a decent reflection of what the world’s biggest importer is thinking.

Australia

Quiet day on the Aussie market front with public holidays in QLD/NSW/SA.

The BOM 8-day forecast has upgraded for WA to receive up to 10mm, SA still remains dry, parts of Western Vic where the crops are later up to 10mm but would love another 20mm.

NNSW & Qld set to receive upwards to 10-20mm in parts with the system sitting more coastal at this stage.

 

 

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