Markets

Daily Market Wire 10 December 2021

Lachstock Consulting, December 10, 2021

Wheat values weakened about 2pc again. Other markets saw mixed small moves.

  • Chicago wheat March contract down US17.75 cents per bushel to 776.75c/bu;
  • Kansas wheat March contract down 15.5c/bu to 796.5c/bu;
  • Minneapolis wheat March down 13c/bu to 1022.25c/bu;
  • MATIF wheat March contract down €4.50/t to €282.50;
  • Corn March contract up 4.5c/bu to 591.75c/bu;
  • Soybeans January contract up 3.5c/bu to 1264.5c/bu
  • Winnipeg canola January 2022 contract down C$2.70/t to $1008/t;
  • MATIF rapeseed February 2022 contract up €1.75/t to €709.25/t;
  • US dollar index was unchanged up 0.3 points to at 96.2 points;
  • AUD weaker at US$0.715;
  • CAD weaker at $1.271;
  • EUR weaker at $1.130;
  • ASX wheat January 2022 down A$4/t to $408/t;
  • ASX wheat January 2023 down $4.50/t to $383.50/t.

International

Evergrande has officially been called into default. Credit agency Fitch Ratings cut Evergrande to “restricted default” over its failure to make two coupon payments by the end of the grace period on Monday. The risk is now that there is potential for the default to snowball. Fitch’s cut came minutes after it applied the same classification on Kaisa Group Holdings Ltd, which failed to repay a US$400 million dollar bond that matured yesterday. The two companies, combined, account for 15pc of outstanding dollar bonds sold by Chinese developers.

USDA reports were published overnight

Wheat

USDA lifted the forecast of 2021-22 world wheat production and ending stocks.  It was a moderately bearish report for wheat. The stocks figure was higher than expected.

21/22 global wheat ending stocks +2.4Mt @ 278.18Mt (276.3Mt expected)

21/22 global wheat production +2.7Mt @ 778.89Mt, of which;

Argentina 20.0Mt (Unchanged),

Australia 34.0Mt (+2.5Mt),

Canada 21.65Mt (+0.65),

EU 138.7Mt (+0.3Mt),

Russia 75.5Mt (+1Mt),

US 44.79Mt

Ukraine 33Mt

21/22 China wheat imports -0.5 to 9.5Mt

21/22 Russian wheat exports unch at 36Mt

US 21/22 total wheat ending stocks +15mbu @ 598mbu (589mbu expected) of which HRW 309mbu (+10), HRS 132mbu (+5), SRW 93mbu (0), SWW 46mbu (0), durum 17mbu (0)

US 21/22 Production @ 1.646bbu (unch)

Corn, oilseeds

The message to take away from the corn and soybeans numbers was that conditions largely are unchanged from previous report.  Market implications for both are mostly neutral.

All corn 21/22 US figures unchanged

US corn ending stocks 1.493bbu (1.487bbu expected)

Production @ 15.062bbu

Yield @ 177.0bu/ac

21/22 China imports unch @ 26Mt

21/22 Brazil & Argentina production unchanged @ 118Mt & 54.5Mt

Oilseeds

US 21/22 soybean all numbers unchanged

Ending stocks 340mbu (352mbu expected)

Production 4.425mbu

Yield 51.2bu/ac

US bean oil 21/22 ending stocks +4mlbs 1,916

US bean meal ending stocks for 21/22 unch @ 400,000st

21/22 world bean ending stocks -0.8Mt @ 103.78Mt

China 21/22 bean imports -1Mt @ 101Mt

Argentina 21/22 production -1.5Mt to 49.5Mt

Brazil 21/22 production unchanged at 144Mt

World 21/22 SBM stocks +0.65Mt @ 13.09Mt

World 21/22 SBO stocks +0.04Mt @ 4.05Mt

Australia

There is more harvest action happening across Victoria and South Australia despite the cold temperatures. Growers are still getting onto paddocks at every opportunity they can get.

Aussie values yesterday were softer across the board. Markets are now starting to take a breather with wheat and barley all bid softer.

The size of the wheat price drops was mixed. Across the port zones most were down $5-10/t. Late in the day contract bids were being pulled or reduced by a further $5/t.

Barley was off $6-8/t on the cashboard bid to the grower and continued to find participants who would trade it.

Canola was well bid with Geelong/Melbourne track values up $5-6/mt.  Growers continue to harvest canola and book the cash at depot price.

Pulses were also stronger over the day with fabas and lentils still well bid in Vic and SA.

More scattered showers pushed through southern NSW and parts of Victoria halting harvest. The forecast for the next 8-10 days looks relatively clear for a good run of harvest now for SNSW through to WA.

 

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