Markets

Daily Market Wire 12 February 2021

Lachstock Consulting, February 12, 2021

Corn and oilseeds recovered. Wheat was mostly lower.

  • Chicago wheat March contract down US2 cents per bushel to 633.5c;
  • Kansas wheat March contract down 3c/bu to 611c;
  • Minneapolis wheat March contract down 2.5c/bu to 616.25.;
  • MATIF wheat March contract up €1/t to €222.50/t;
  • Corn March contract up 6.5c/bu to 541c;
  • Soybeans March contract up 13.5c/bu to 1367.5c;
  • Winnipeg canola March contract up C$5.80/t to $704.10;
  • MATIF rapeseed May contract up €3/t to €446.75.;
  • Brent crude April down US$0.33 per barrel to $61.14;
  • Dow Jones index down 7 points to 31,431;
  • US dollar index down 0.02 to 90.4
  • AUD firmer at $0.775;
  • CAD weaker at $1.270;
  • EUR firmer at $1.213

International

Stimulus funding the EU calls its Recovery and Resilience Facility, amounting to €672.5 billion (US815bn), was passed by parliament.  Compared with the US the EU plan targets longer term projects with a mix of loans/grants moreso than the US stimulus.

Proposals in the US to make large direct payments specifically to “minority” farms are raising concerns about the disparate impacts this would have on US farmers. There’s potential for ongoing litigation if future farm bills were to include more such discriminatory clauses.

Regular export sales reports were mostly as, or slightly higher than, expected. Weekly wheat sales were 0.6Mt, corn 1.4Mt, beans 0.8Mt and there was 110,000t of new sorghum sales to China.

No new sales flashes, or sales cancellations, were reported today and with China in holiday mode little new is expected into next week.

Brazil’s national ag agency CONAB increased its corn production estimate by 3.2Mt to 105.5Mt on a higher safrinha crop, forecasting a greater area would be planted.  This isn’t entirely an unusual change though, as they have a normal tendency to gradually push that figure higher through the first several months of the year.  Delayed planting remains a concern in many areas with the late bean harvest and slightly wetter forecast runs today.

Argentina’s Bolsa de Comercio de Rosario grain exchange also increased its corn and bean crop estimates, +2.5Mt, +2Mt respectively, after the Jan rains, suggesting most risk is now off the table. This is despite current dry weather maps.

The USDA outlook forum in mid-February will be electronic this year. The afternoon sessions on 18 February, which in Australia would be mid-morning on the 19 February, will include a focus on the USDA’s view of Chinese market impacts. It’s free to register and attend for those who wish to tune in.

Australia

The current crop ASX east coast wheat futures contract broke off nearly $5/t with the global board sell off, but otherwise local markets remain in execution/logistics mode.

More coronavirus cases in Melbourne are raising concerns of a new lockdown there – not something the local economy is looking forward to.

BOM climate outlooks yesterday still look optimistic for SA and most of the east coast with much of the cropping areas there in the 55-60+pc range for above normal rainfall into planting.

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