Markets

Daily Market Wire 12 March 2020

Lachstock Consulting, March 12, 2020

Grains and oilseeds futures were lower.

  • Chicago wheat May contract down US9.5¢/bu to 512.75¢;
  • Kansas wheat May contract down 9.25c to 435.5¢;
  • Minneapolis wheat May contract down 6.75¢ to 512¢;
  • MATIF wheat May contract down €0.75/t to €177.25/t;
  • Corn May contract down 3¢/bu to 374.5¢;
  • Soybeans May contract down 3¢/bu to 873.25¢;
  • Winnipeg canola May contract down C$0.80/t to $460.10/t;
  • MATIF rapeseed May contract down €2.25/t to €367.75/t;
  • Brent crude May contract down US$1.43 per barrel to $35.79
  • Dow Jones index down 1465 points to 23553;
  • AUD weaker at $0.6490;
  • CAD weaker at $1.378;
  • EUR weaker at $1.125.

Market news

It’s been a while since we heard the phrase “dead cat bounce” thrown around, but that’s what the market indicated yesterday’s action was.  The DOW was back down 1465 points by close (up slightly from mid-session lows) and crude is off almost a buck fifty to $33 WTI/$35.8 Brent.  Wheat hit the chopping block with Chicago leading the way down 9.5¢ to 512 3/4¢, KC -9 1/4¢ to 435.5¢, Minny -6 3/4¢ to 512¢, and Matif -0.75€ to 177.25€ on the earlier close.  Row crops were both off three cents to 374.5¢ / 873.25¢ and canola dropped $0.8 on Winnipeg to $460.1 (Matif -2.25€ to 367.75€).  The AUD’s holding slightly under 65¢ (64.9 currently), the CAD $1.378, and the EUR $1.125.

Stimulus measures are still in the talking but there’s been some acceptance that fiscal measures may take longer to be decided upon.  The Bank of England made an “emergency” cut overnight.  Coronavirus impacts continue to expand globally and the WHO finally decided we’re in a “pandemic.”  Not that the designation means particularly much to the markets, or to any responses to the virus.  Uncertainty, instability, and pessimism remain the rule for markets right now until they see some more concrete evidence that the problems are past and global economies will return to growth.

Fundamental ag news has been quiet. There was a spatter of grain tenders but no word yet on Algerian results which will be the most interesting to wheat markets.

There’s a little bit of rain trickling into the maps for southern Russia into next week, but wheat areas there remain drier and warmer than normal.  Local concerns about the crop remain relatively limited though, and more new season exports continue to be offered.

We’ve also got some drier conditions on the weather maps for France and Central Europe, tempering some of the concerns over excessive moisture.

Another three boats of bean export sales flashed in the US, one for new crop, which has triggered some speculation about Chinese demand.  There’s talk that logistical delays in Brazil, which still has significant volumes of cheap beans available, are forcing short covering from the US by Chinese crushers.

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Australia

Aussie markets are abuzz about the rapid buying action to start the week in barley – taking out quite a few offers and bidding basically across the country.  Is it Chinese demand stepping back in?  Given the size of the action and absence of likely alternative destinations that’s the story that’s gaining the most traction.  Aussie barley comes nowhere close to pricing SAGO at these levels versus new crop Black Sea barley.

New crop wheat was up a dollar or so yesterday, but remains relatively quiet.  Rain maps remain great for WA this weekend, but drier for a spell across the east coast.

 

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