Markets

Daily Market Wire 1 May 2020

Lachstock Consulting, May 1, 2020

All markets firmer. Soybeans gained 2pc, hard classes led wheat.

  • Chicago wheat July contract up US7.75¢/bu to 524.25¢;
  • Kansas wheat July contract up 11c to 488¢;
  • Minneapolis wheat July contract up 8c to 515.5¢;
  • MATIF wheat September contract up €1.25 /t to €184.50;
  • Corn July contract up 5.5c/bu to 320¢;
  • Soybeans July contract up 17.75¢/bu to 855.25¢;
  • Winnipeg canola July contract up $C3.40 to $465.40/t;
  • MATIF rapeseed August contract up €2.75 to €367.50;
  • Brent crude June contract up US$2.73 per barrel to $25.27
  • Brent crude July contract up US$2.25 per barrel to $26.48
  • Dow Jones index down 288 points to 24346;
  • AUD weaker at $0.6493;
  • CAD weaker at $1.3958;
  • EUR firmer at $1.0943.

Markets

Wheat finally found some support and bounced overnight. Corn closes high and beans jumped on rumours of more China demand coming for late-summer shipment.  Crude oil has continued to firm, up $4 to $18.80 for WTI and Brent even at $25.30 as more talk of Saudi tankers hitting the US in the next few weeks raises concerns about the next crude delivery window.

Chinese buyers reportedly picked up five boats of old crop US soybeans for late summer shipment, with some talking the business up to 10.  No flashes yet, but if the report is true we’d expect to see something hitting as it’s likely that these will put at least one party over the reporting threshold. The US weekly export sales report was generally in line with expectations, perhaps slightly on the positive side. Corn was 1.3Mt, beans 1.1Mt and wheat 467,000t plus 155,000t new crop.  There were also four new boats of US sorghum to China plus two more switched from unknown, and some big pork sales to China.

Southern Russia dry, Ukraine cut

Black Sea weather remains front and centre on the grain markets, with the current two week weather maps not bringing much moisture at all to southern Russian wheat areas.  Analyst group APK has already cut their new season corn estimate in Ukraine, taking it down by just under a million tonnes to 36Mt. APK cited the ongoing weather challenges in spite of a little more moisture appearing on the maps for central Ukraine corn areas.  They’ve also cut their wheat figure to 24.5Mt, down 2.2Mt an account of the recent weather.

Abnormal dryness drought monitor

Analysts are also re-reviewing US Hard Red Winter wheat areas given the ongoing frost damage confirmations and the continued dryness in the Panhandle and surrounding areas US drought monitor last night confirmed the expanded areas of abnormal dryness.  None of this is truly new, but sometimes it takes a while for markets, and those groups who follow the fundamentals less closely, to take note of the problems coming.

Given that the May futures contracts have commenced their delivery period, it’s notable that no physical wheat was delivered against the Chicago SRW, a small quantity against the KC HRW contract and but 238 contracts physically delivered against Minneapolis Hard Red Spring May wheat.  There were 223 contracts of corn deliveries. This needs watching relatively closely given the current situation regarding corn and ethanol markets.

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Australia

The latest near term BOM climate outlook was published yesterday, skewing significantly towards a wetter outlook in May/June.  Grain markets have remained quiet to end the week, with focus on new crop and planting activity.

In honour of May Day, we’d like close with a lighter comment today.  Stay out of the mud, or else you may be calling the same neighbour, who previously told you that the paddock looked rather wet, for a tow. We wish everyone good luck with seeding.

Lachstock’s correspondent Tom Ostby in a sticky situation in Montana.

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