Markets

Daily Market Wire 11 May 2020

Lachstock Consulting, May 11, 2020

Markets mixed.

  • Chicago wheat July contract down US0.5¢/bu to 522¢;
  • Kansas wheat July contract up 1.25c to 480¢;
  • Minneapolis wheat July contract up 5c to 516¢;
  • MATIF wheat September contract unchanged at €188.25/t;
  • Corn July contract up 1.25c/bu to 319.25¢;
  • Soybeans July contract up 6.25¢/bu to 850.5¢;
  • Winnipeg canola July contract up $C1.40 to $468.60/t;
  • MATIF rapeseed August contract down €1.50 to €372.75/t;
  • Brent crude July contract up US$1.51 per barrel to $30.97
  • Dow Jones index up 455 points to 24331;
  • AUD firmer at $0.6553;
  • CAD firmer at $1.3913;
  • EUR firmer at $1.0846.

Markets

In the wheat pits Chicago settled down -0.5 usc/bu closing at 522usc/bu, Kansas was 1.25 usc/bu higher to settle at 480usc/bu, while Minni rallied 5 usc/bu to go out at 516usc/bu. Corn gained 1.25 usc/bu to go out at 319.25usc/bu while Beans were up 6.25 usc/bu to settle at 850.5usc/bu WCE Canola rallied 1.8 CAD/mt closing at 464.2CAD/mt with Matif Canola finishing lower by -1.5 Eur/mt. In outside markets the Dow Jones gained 455.43 points, Crude was down -0.53 bbl the Aussie was -0.0009 points lower to settle at 0.652, the CAD softened -0.0002 while the EUR fell -0.0006.

Markets offshore were mixed ahead of Tuesday night’s USDA crop reports. Small stories were scattered throughout an otherwise bleak backdrop which gave the bulls a sliver of hope. It seems corn has found some sort of bottom, mainly in response to signs of life for crude demand but also in some vague notion that phase 1 China-US trade deal buying could still save the balance sheet. Wheat held up pretty well given the rainfall outlook and the growing realisation that demand globally has taken a beating.

Tariff threat

Weekend news was all about the potential for the Peoples Republic of China, Ministry of Commerce (MOFCOM) to impose tariffs on barley imported from Australia as a possible outcome of their ongoing anti-dumping and countervailing duties investigations.

A joint statement from Australian trade and grower groups said, “The yet to be finalised tariffs, may include a dumping margin of up to 73.6% and a subsidy margin of up to 6.9% for barley imported from Australia. Australian barley exporters and the Australian Government have been provided with 10 days to respond. It is understood MOFCOM may provide their final determination on, or before 19 May 2020.”

The wording of the announcement is pretty dire for the Australia barley producer as it suggests China’s mind is already made up. It would seem the only way the Australian market can prevent this becoming reality is for a government-to-government solution to be found. We can’t ignore the fact Australia has imposed restrictions on Chinese business such as Huawei so finding an answer is certainly challenging if close to impossible.

Australia market easier

Weekend showers pushed through parts of SA and Vic with some areas recording upwards of 10mm to continue to top up moisture. Seeding delays are still occurring through parts of Vic. NSW growers have recommenced seeding. There’s little on the forecast for the week ahead that would prevent a solid week of planting across the country. We will see how the market reacts to the barley tariff news over the week, given barley values have been off around $30/mt in some port zones.  Does this add more downside to the market? New crop barley and wheat markets last Friday were softer. Eastern Australia ASX Jan 21 wheat settled at $313.50/t and barley $254/mt. New crop canola markets last week bounced around following currency and offshore markets. Old crop canola remained flat.

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