Markets

Daily Market Wire 11 February 2021

Lachstock Consulting, February 11, 2021

Markets gapped lower.

  • Chicago wheat March contract down US14 cents per bushel to 635.5c;
  • Kansas wheat March contract down 19.5c/bu to 614c;
  • Minneapolis wheat March contract down 7.75c/bu to 618.75.;
  • MATIF wheat March contract down €2.25/t to €221.50/t;
  • Corn March contract down 21.75c/bu to 534.5c;
  • Soybeans March contract down 47.75c/bu to 1354c;
  • Winnipeg canola March contract down C$8/t to $698.30;
  • MATIF rapeseed May contract down €2.50/t to €443.75.;
  • Brent crude April up US$0.38 per barrel to $61.47;
  • Dow Jones index up 62 points to 31,438;
  • AUD weaker at $0.774;
  • CAD steady at $1.269;
  • EUR firmer at $1.212

International

Row-crop markets broke off hard in overnight trading as longs started to push out, with a crowded trade position all trying to move in the same direction at once.

The USDA may be wrong on absolute figures, but in the end the market tends to eventually trade its numbers, and with as much crowding on the long side as we’ve seen on the spec long so far this year, there was plenty of volume looking to square up with fairly few new buyers.  With the lower closes, we’re also starting to push against some traditional technical levels, leading to plenty of debate about how much more sales pressure there is to come, and what levels we need to hit to stop the haemorrhaging.

With the collapse in futures values, there’s renewed debate about the area pie, and shift for new-crop corn and soybeans. Deferred months have held up much better than the front end, but are still shifting the ratio/spread slightly back towards corn.

Baseline figures from the USDA are due out later this month and are always watched as a precursor to the March planting intentions report.

In export news, there was a flash cancellation for US 132,000t of current-crop corn.  Market talk is suggesting it was South Korean business, but it did nothing to calm the market which was already trading off.

More Russian wheat is reported to be hitting the offer side of markets for the next few months as farmers start to sell more grain there and trade longs push to square books.

We are still watching the South American weather forecast which keeps holding a drier edge into next week, and good harvest weather prospects are expanding across the Brazilian soybean belt.

Chinese markets are going into holiday mode with New Year on Friday.

Australia

Local markets were a tick weaker yesterday after the WASDE pressure, with the ASX giving up Tuesday’s gains, the nearby wheat contract settling at $296.5/t down $3.50/t. Cash bids were up for some front-end deliveries, but otherwise the market was fairly quiet as bid depth drops off.

New-season area ideas continue to shift around as planting time nears; the stronger Australian dollar has put some pressure on new-crop markets, but there are still generally attractive options with the firming in global commodities.

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