Markets

Daily Market Wire 11 November 2019

Lachstock Consulting, November 11, 2019

US futures were mostly lower amid a strengthening US currency.  Winnipeg and Paris were firmer.

  • Chicago wheat December contract down 2.25 cents per bushel to 510.25c;
  • Kansas wheat December contract down 3.25c to 421.5c;
  • Minneapolis wheat December contract down 0.75c to 518c;
  • MATIF wheat December contract up €0.25 to €178.50;
  • Corn December contract up 2c to 377.25c;
  • Soybeans January contract down 5.5c to 931c;
  • Winnipeg canola January contract up C$2.10 to $463.30
  • MATIF rapeseed February contract up €1.75 to €389.75;
  • Brent crude January contract up $0.22 to $62.51;
  • Dow Jones index up 6.44 points to 27681.24 points;
  • AUD weakened to US$0.6858;
  • CAD weakened to $1.3229;
  • EUR weakened to $1.1022;

In the wheat pits Chicago settled down -2.25 usc/bu closing at 510.25usc/bu, Kansas was -3.25 usc/bu lower to settle at 421.5usc/bu, while Minni softened -0.25 usc/bu to go out at 518.5usc/bu. Corn gained 2 usc/bu to go out at 377.25usc/bu while Beans were down -5.5 usc/bu to settle at 919.5usc/bu WCE Canola rallied 2.1 CAD/mt closing at 456.8CAD/mt with Matif Canola finishing lower by 0 Eur/mt. In outside markets the Dow Jones gained 6.44 points, Crude was up 0.09 bbl the Aussie was -0.0042 points lower to settle at 0.68534, the CAD rallied 0.0054 while the EUR fell -0.0031

 

USDA report release hiccough

You have to disregard the market closes last Friday as they don’t provide any insight into the debacle the report release was.

The USDA report is always a much watched release – there are hedge funds that purely position based on the numbers the USDA puts out so it becomes a game of speed – high frequency trading is as fascinating as it is frightening.

As the USDA was about to punch out the numbers they ran into “technical difficulties” and, when the dust settled and the report became available, it seemed like not everyone missed the release.

I’m sure we will hear more about this.

Wheat predictable

Wheat was, as expected, a push.

Small cuts to Argy (down 500,000t) and Australia (down 800,000t) were offset by increases in the EU and Russia.

All the wheat changes of note were in the US with 42 million bushels (mbu) sliced off the spring wheat crop.

This was the driver to a tightening of carryout with the ending stocks figure pegged at 1.014 billion bushels (bbu) while the market was looking for 1.035bbu.

Corn take what you want, beans on hold

The main event from Friday’s report was the corn yield estimate.

I have long been impressed with the USDA’s ability to give the market just enough to keep it guessing – and they didn’t let me down.

Corn yield was lowered to 167bu/ac from their previous estimate of 168.4bu/ac and the average guess leading into the report of 167.5bu/ac.

Bullish. Ahhh, but wait, they then cut exports by 50 mbu, ethanol by 25mbu and feed use by 25mbu, which put carryout at 1.910 bbu versus the best guess of 1.817bbu. Bearish.

Some tweaks to China stocks, down by 6.6Mt added some support.

Beans were forgotten – USDA leaving yield unchanged – potentially looking to do all the adjusting in the Jan report given how late the crop is.

Trump’s comments suggesting that they haven’t agreed to any tariff roll back were more influential than the USDA which led beans lower.

All up this report was a non-event.

There is enough uncertainty in outside markets that the market will find direction elsewhere.

At some point we need to register the fact we have the lowest wheat planted area in the US in since the early 1900’s mixed in with the rolling maul of US/China trade relations, South American weather, Black Sea planting moisture and a public impeachment inquiry.

There is more than enough for the traders to get their teeth into – however, many of these inputs are seeming more volatile than the weather.

Australia

Locally harvest got going again through parts of Western Australia, SA and New South Wales over the weekend, however today will see total fire bans for most of the country that will pull things up, then the temps for SA drop again into the low 20s.

WX maps yet again show some hope in the back end with a front moving in over the north, a sorghum plant still remains on the cards for growers if they can jag another rain event.

Sorghum market continues to strengthen on new crop with values for March Brisbane track around $395/t.

Bid side firmed a tad in southern barley markets and while quality still remains up in the air on barley does this mean we will see a floor in the market? ASX Jan wheat settled $340/t on Friday up $2/t from the start of the week.

 

 

 

 

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