Grain markets broke back overnight in the US, giving up yesterday’s gains as they continue to chop around and look for a broader direction.

• CBOT wheat down 3 cents per bushel,
• Kansas wheat down 5,
• Minneapolis wheat down 2,
• MATIF wheat down €1.50. 
• Corn down 5c
• Soybeans down 4c
• MATIF rapeseed down €1.5 on the May contract,
• Winnipeg canola down C$3,
• Dow Jones was off early session over a hundred points but has recovered some mid-session (off 42 points as of writing),
• West Texas crude oil down 50c and Brent up 20c to $61.90
• AUD up slightly to .7270.
• EUR down to $1.144
• CAD  $1.315

US trade policy

The US/China trade discussions continue to drag on, with ongoing disputes over forced technology transfers and no apparent resolution to the question of enforcement on the deal.  The US’ President Trump has announced that there will be no deal finalized until his meeting with the Chinese premier – which is expected to happen on the first of March – but two more rounds of talks are expected before then.

International market news

US export sales were finally out . . . from mid-December.  No real surprises to be had by this point, and figures were largely in line with expectations from the time.   Bean sales did confirm ~1.5 million tonnes (Mt) of Chinese demand – but still down ~86pc YTD given the politics/trade war.  Global news has been similarly muted – Egypt’s Agriculture Ministry announced that they’re expecting a better local wheat crop this year – up to 9.5 Mt (from 9 Mt this year).  Pakistan has officially approved another 500,000t of wheat exports (following the first sales late 2018).  The EU has confirmed an exemption to anti-subsidy duties on Argy biodiesel for producers following a minimum price agreement – but the commission still has to sign off on it to get the final approval.  Still no word on the final minimum price there.

Australia

More grain has been trickling into east coast markets this week, with more barley offers in particularly hitting across the states.  New crop interest has also slowly begun to pick up, with the inverse on wheat some ~$100/t and ~$90/t on barley across central NSW.  Sorghum crops continue to deteriorate, and there’s some ~75,000 hectares of non-irrigated cotton that has also fallen apart in the heat – cottonseed markets are up some $40/t in the last month.  The BOM was out with updated three month climate outlooks – some improvement to potentials for rain on the east coast for Feb, but otherwise hot and dry (including WA).

Source: Lachstock Consulting