Daily market wire 10 January 2020

Lachstock Consulting, January 10, 2020


Market news

Wheat jumped through the day session in the US amidst pessimism about new season acres and optimism about Chinese demand.

Chicago wheat ended up 9.5¢ to 562 1/4¢, KC +10 1/4¢ to 490 1/4¢, and Minny +4 1/4¢ to 552¢ (Matif ended up 1.75€ on the earlier close to 191 3/4€).  The question now will be what we see the UDA publish during Friday’s session and if it is sufficient to justify follow-through.  Corn gave up a penny to 383 1/4¢, and beans were off 3 3/4¢ to 943.5¢ (Matif +2.75€ to 420€ , Winnipeg +$2.5 to $483.2).  Crude oil has finally steady down, with WTI at $59.5/Brent $65.4 and the DOW jumped 212 points.  The AUD is trading around 68.5¢, the CAD $1.306, and the EUR $1.111.

There’s still no formal confirmation about what will be in the upcoming trade deal, but plenty of speculation.

No more flash sales yet from the USDA either, although there were rumours around about impending Chinese wheat purchases. We’ll see what comes of that.  Likewise bean purchases.  There have been more Brazilian new crop beans sold in recent days, but there are also hopes going around that these may be shifted to US supplies after the deal is signed.  Given the upcoming Brazilian harvest that seems economically unlikely, but this is politics.  Brazil’s potential new record bean crop remains an object of market fascination. Reported private estimates today pegged it into the mid-124-million-tonnes range, 2Mt higher that the estimate released yesterday by Brazil’s National Supply Company, Companhia Nacional de Abastecimento, (Conab).

Dry weather concerns remain for parts of the south, but there is moisture on the radar for some of the drier spots and in general conditions remain supportive for beans.

Early safrinha corn is also already going in on silaged corn stubble in the south, but these are minor areas in the broader picture. The majority of safrinha corn is over a month away from planting.

Tonight (Friday US time) brings an avalanche of crop reports from the USDA. Final row crop figures and winter wheat acres of the most importance.

Firm corn basis across the central corn belt in the US has many expecting that the reports will confirm expectations of lower row crop figures.

However, the true “market expectation” remains a hard figure to gauge and price response post report will be driven by the difference between published figures and expectations, not between published figures and prior figures.


Back locally, we continue to watch these weather forecasts with some improvements in the mid-day GFS bringing higher moisture amounts across western NSW. BOM models and later run GFS taking those hopes away but still reporting good chances further east.  Temperature outlooks have moderated slightly into next week which can only help.  Stay safe this weekend.


Source: Lachstock


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