Markets

Daily Market Wire 11 February 2019

Lachstock Consulting, February 11, 2019
  • CBOT wheat up 4 cents per bushel to 517.25c,
  • Kansas wheat down 2c to 494.25c,
  • Corn down 2.25c to 374.25c,
  • Soybeans up 1.25c to 914.5c,
  • Winnipeg canola down C$0.89 to $483.30,
  • Matif canola down €1 per tonne to €372/t,
  • Dow Jones down 63.19 to 25106.33,
  • Crude oil up US$0.07 to $52.71,
  • AUD up to 0.70866c,
  • CAD down to 1.32687c (AUDCAD 0.94028),
  • EUR down to 1.13149c (AUDEUR 0.6261).

Wheat

The market has been sitting back waiting for some new direction, and received a World Agricultural Supply and Demand Estimate (WASDE) report which contained very little news. Firstly, year-on-year Hard Red Winter wheat area came off 3 per cent, with Soft Red Winter (SRW) down 7pc, which came as no surprise. Along with this, wheat stocks came in pretty much bang on expectations at 1.999 billion bushels versus market ideas of 1.957b. At least there was a GASC tender from Egypt which has given the market something to talk about. Egypt got its hands on 300,000t of wheat at $260-$261.20/t, made up of 120,000t French, 120,000t SRW and 60,000t Romanian. As a result of little fresh news, we have SRW remaining the cheapest wheat in the world as it continues to price into every corner of the globe.

Corn

A similarly lacklustre scenario for corn has emerged from the WASDE, with the long-awaited yield estimate cut by 2.5 bushels per acre to 176.4bu, below market ideas of 177.6bu. The estimate for Argentine corn production was bumped up by 3.5 million tonnes (Mt) to 46Mt, and Brazil remained unchanged at 94.5Mt.

Soybeans

US soybean futures strengthened after they too lost ground in terms of production. The WASDE report posted a yield estimate of 51.6bu, below market ideas of 52.1bu in November. On the global front, the estimate for Brazil’s crop was reduced by 5Mt to 117Mt, with Argentinian production pegged at 55Mt, down 500,000t from the previous estimate. Stocks were about standard at 3.736b bushels, below market expectations of 3.743b.

Australia

Domestically, the eight-day rainfall forecast in Australia has all but dissipated. Over the past week, Queensland recorded  the most rain, with 200-400 millimetres falling in some parts which may go a long way towards filling up water storages and parts of the Channel Country in the state’s southwest. Much of New South Wales received up to 50mm.

 

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