Markets

Daily Market Wire 13 August 2020

Lachstock Consulting, August 13, 2020

Oilseeds were firmer, grains were mixed..

  • Chicago wheat September contract down US3.75c/bu to 491.25c;
  • Kansas wheat September contract up 1c/bu to 417.75c;
  • Minneapolis wheat September contract down 0.5c/bu to 492.25c;
  • Corn September contract up 3c/bu to 314.5c;
  • Soybeans September contract up 10c to 880.5;
  • Winnipeg canola November up C$1.40 to C$485.40;
  • MATIF wheat September contract down €0.25 to €177.50;
  • MATIF rapeseed November contract up €3/t to €376.50;
  • Brent crude October contract up US$0.93 per barrel to $45.43;
  • Dow Jones index up 289 points to 27,975;
  • AUD firmer at $0.717;
  • CAD firmer at $1.324;
  • EUR firmer at $1.181.

We got a bearish report, but grains managed to make the best of it with a rally coming after the session lows to help row crops close on a positive note.

Wheat was off on Chicago though, down 3 3/4¢ to 491 1/4¢, KC +1¢ to 417 3/4¢, Minny -1/2¢ to 492 1/4¢, and Matif -0.25€ to 177.5 € on the earlier close.  Corn picked up 3¢ to 314.5¢ and beans were up a dime to 880.5¢ (Matif +3€, WInnipeg +1.4€).  Crude oil was up a buck to $42.7 WTI / $45.4 Brent and the DOW was up 289 points.  The AUD’s trading at 71.7¢, the CAD $1.324, the EUR $1.181, and the dollar index slightly weaker to 93.2.

The USDA’s latest WASDE report, released overnight, pencilled US corn yield at 181.8 bu/acre (up from 178.5 prior) and beans at 53.3 (up from 49.8).  This all translated through to higher ending stocks with corn at 2.7 bbu (would have been higher, but they pushed feed and exports) and beans at 610 mbu (+185 mbu on prior report).  Interesting to note that they (specifically) pointed out that the recent storms were not factored into their calculation.  Spring wheat production was up 28 mbu after the summer weather while they cut winter wheat – net overall wheat was up 15 mbu but offset by higher exports.  Global figures saw Russian production +1.5 million tonnes (Mt) (many had expected more), Argy -0.5 MMT, and Aussie unchanged at 26 MMT (we expect a revision next WASDE, more in line with their normal time frame for changes).  Now the question is what do we take off this report?  The USDA’s confirmed themselves to very much be in the “big production” camp, and markets are pretty well suggesting that >2.5 BBU carry out needs to be trading around the $3/bu level on corn.

Beyond the WASDE, post the close-of-the-market we saw Egypt’s GASC back again for more wheat.  After taking the low hanging fruit last tender, it may prove interesting to see the offers this round. It was reported that there was more farmer sales activity later in the day in the Black Sea region prior to the WASDE.  The EU has also confirmed their new corn import tariff, set a €5.48/t.  That’s a formula-driven tariff so it was no surprise to see, but does hurt the competitiveness of imported corn vs local feed supplies.

Australia

Widespread rains continued across central NSW/Vic/SA through yesterday, although overall totals remained low.  Forecasts are still calling for 10-15 mm across the wheat belt of NSW and northern Vic but there’s hardly anything on the two-week maps. Crops will need some follow up.

 

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