Markets

Daily Market Wire 10 April 2020

Lachstock Consulting, April 10, 2020

Markets closed firmer Thursday. US dollar weakened.

  • Chicago wheat May contract up US8.25¢/bu to 556.5¢;
  • Kansas wheat May contract up 14c to 492¢;
  • Minneapolis wheat May contract up 2.5c to 532.5¢;
  • MATIF wheat May contract up €0.75/t to €198/t;
  • Corn May contract up 1.75c/bu to 331.75¢;
  • Soybeans May contract up 9¢/bu to 863.5¢;
  • Winnipeg canola May contract up $C1.30 to $463.60/t;
  • MATIF rapeseed May contract up €0.75 to €371.75/t;
  • Brent crude June contract down US$1.36 per barrel to $31.48;
  • Dow Jones index up 286 points to 23719;
  • AUD firmer at $0.6325;
  • CAD firmer at $1.3995;
  • EUR firmer at $1.0927.

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Markets

Worries about the frost forecast across western Kansas as helping prop up HRW bids at current. The recent cooling may have tempered the growth enough to avoid any significant damage.

KC ended up 14¢ to 492¢, Chicago +8 1/4¢ to 556.5¢, Minny +2.5¢ to 532.5¢, and Matif closed up 0.75 to 198€ on the earlier close.  It’s been a rare frost event that actually causes significant damage in recent years, but time will tell.  Corn closed +1 3/4¢ to 331 3/4¢, beans +9¢ to 863.5¢, and Winnipeg was up a buck thirty to $463.6 (Matif +0.75€ t 371.75€).

Crude oil has traded down (WTI hitting 22.7, Brent $31.5) despite rallying initially after the OPEC deal was announced – markets have been heavily concerned that production cuts may not be enough relative to plummeting global demand.  Quiet on equity markets though, with the DOW up 286 points.

The AUD continued to firm to 63.6¢, the CAD $1.397, and the EUR $1.093 as the USD weakens after yet another massive jobless claims figure (6.6 million).

With the ongoing economic problems and backlogs being reported in claim processing, ideas are circulating that next week may well bring another massive figure.

USDA April numbers taken in stride

The USDA released their updated WASDE figures for April overnight, which the markets have general taken as a non-event.  Ethanol demand was sharply cut on corn (-375 million bushels) which took corn ending stocks higher than surveyed estimates, but all in all the changes were relatively in line with expectations.  Extrapolating off the recent ethanol production figures suggests that they could easily have come down this much again still on old crop which would have been a far bigger scare to the market.

Global wheat figures were looser than expected, with slightly weaker demand and a few carryin changes but despite often getting headline attention those figures rarely mean much to the board.  Markets are fully focused on the new crop situation at the moment.

Now we’re back to waiting for May, when the first new crop figures are formally published.

Brazil’s CONAB was also out with their updated production estimates, calling for a bigger corn crop there with higher than expected safrinha acreage despite the harvest problems on beans.

Weekly export sales strong

Export sales were very solid on corn (1.8 million tonnes old crop, plus the China biz on new crop), slightly better than expected on wheat (260,000t), and as expected on beans, 500,000t, and with a new crop China bean boat.  No new export sales flashes to be seen yet, although there has been talk circulating around the market that China bought an ethanol boat.

Romania has banned wheat exports – but only until mid-May, and not (yet?) a factor for the new crop situation.  It’s normally not a big player at this time of the year anyway.

This long weekend is time for markets and marketers to reflect and reconsider positions into next week.  Coronavirus continues to rampage around the world, but are we pushing past the peak?  It’s been a discussion point for a little while now, but few on the macro side are keen to hang their hat on it yet.  New crop weather continues to build in importance and after this frost event is over we are likely going to be due for a corn/bean planting scare.  Wheat does have some more pressing concerns though – Black Sea weather maps are a little wetter than they have been, but they needed it a week ago.  How much damage has really been done?  Crop tours are on partial hold there with travel restrictions between regions in Russia, but lots of assessment to be done.

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