Markets

Daily Market Wire 10 November 2021

Lachstock Consulting, November 10, 2021

Markets firmed between 1pc and 2pc.

  • Chicago wheat December contract up US10.5c/bu to 778.5c/bu;
  • Kansas wheat December contract up 12.75c/bu to 793.5c/bu;
  • Minneapolis wheat December up 15c/bu to 1023.75c/bu;
  • MATIF wheat December contract up €2.25/t to €286/t;
  • Corn December contract up 3.25c/bu to 554.75c/bu;
  • Soybeans January contract up 23.5c/bu to 1212c/bu;
  • Winnipeg canola March 2022 contract up C$9.60/t to $964.20/t;
  • MATIF rapeseed February 2022 contract up €14.25/t to €692.75/t;
  • US dollar index was down 0.1 to 94;
  • AUD weaker at US$0.738;
  • CAD firmer at $1.244;
  • EUR unchanged at $1.159;
  • ASX wheat January 2022 up A$2/t to $359/t;
  • ASX wheat January 2023 unchanged at $369/t.

International

USDA report day…. Closing prints don’t reflect the fun and games throughout the session – however, US wheat markets all closed around 1½ per cent firmer than previous day. Kansas closed on the highs of the day while Minneapolis still managed a 15usc/bu higher close despite a heavier report. Chicago corn spiked more than 2pc during the day and closed less than 1pc firmer. Dalian corn had yet another positive close, up CNY$13/t. Soybeans was the beneficiary of the most bullish surprise which generated a day-trading range almost 5pc, and settled around 2pc higher than previous day. Meal was up USD$10.2/st while beanoil added 0.5usc/bu. Canola found some buying, Winnipeg closed 1pc firmer, while Matif put on EUR$14.25/t, closing more than 2pc higher than previous day. The Dow Jones fell 112 points while crude oil keeps pushing higher, adding US$2.63/bbl.

The main features of the overnight USDA reports are as follows;

21/22 Global wheat ending stocks -1.4Mt @ 275.8Mt (276.5Mt expected)

21/22 Global wheat production -0.6Mt @ 775.28Mt. Majors mostly unchanged. Argentina 20.0Mt, Aust 31.5Mt, Canada 21.00Mt, EU 138.4Mt (-1.0Mt), Russia 74.5Mt (+2Mt), USA 44.79Mt & Ukraine 33Mt

21/22 Russian wheat exports +1Mt at 36Mt

US 21/22 total wheat ending stocks +3mbu @ 583mbu (581mbu expected). HRW 299mbu (-22), HRS 127mbu (+14), SRW 93mbu (-1), SWW 46mbu (+5), Durum 17mbu (-3)

21/22 US corn ending stocks 1.493bbu (1.480bbu expected)

20/21 Brazil corn production unch @ 86Mt

21/22 China corn imports unch @ 26Mt

US 21/22 soybean ending stocks +20mbu to 340mbu (362mbu expected)

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

The bean yield was a surprise to the market and with the market pretty short we caught a bid today. Beans launched more than US$0.50/bu out of the gate before giving back half of that as the market consolidated through the session to finish +23.54c/bu for the day. The report was modestly bullish for beans because it was against the trend. The cut in Argentina production this early on helped the positive market sentiment too.

China Evergrande Group is due to make coupon payments totalling US$148.1m as their grace period ends on Wednesday. While they have recently met other delayed coupons the local bond market is suggesting a lack of confidence in today’s payment.

Palmoil hit its lowest level in over a month ahead of the Malaysian Palm Oil Board stocks report today.

With the Chinese corn crop all but in the bin local prices continue to ratchet higher. Growers are still dealing with what was a wet harvest so drying down grain has created some tightness in the supply chain, despite the crop being regarded as above average.

Soft wheat shipments from the EU were pegged at 16pc higher year on year although, for reasons unknown to me, France has only updated their figures until July. The vessel data suggests the French stocks situation could be tighter than expectations. The USDA tightened EU ending stocks by just under 1Mt.

Australia

Local markets were yet again a fraction firmer on wheat and barley yesterday across the boards. Wheat trade bids showed gains of A$2-3/t. Grower cash bids were unchanged as limited harvest action was seen along the east coast.

Barley saw small gains in the Victorian and SA markets by $2-3/t. Canola fell $20/t in WA on the grower boards while Victoria market caught a bid and was up by the day’s end being bid $900-910/t track range site dependent.

More wet weather arrived in the past 24 hours. Geraldton and northern Kwinana region received a widespread 5-20mm according to the BOM latest rainfall while scattered showers pushed across the South Australian cropping regions of the Yorke Peninsula and the Mid North where harvest has been underway in a very stop-start way. It is a common theme this harvest.

Viterra loaded its first train this week of new season barley that loaded 2400t out of Port Pirie headed to Outer Harbour for upcoming barley export program with Bowmans and Snowtown sites loading trains as well.

LSC latest vessel lineups report has approx 213,228t of wheat on the shipping stem for SA and 215,954t of barley to be shipped for the November period. We will continue to see very little harvest action along the east coast again for another day. Markets around the globe are also eager to know how the quality of the Aussie wheat crop is holding up thoughout this wet period.

 

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