Markets

Daily Market Wire 13 December 2019

Guest Author, December 13, 2019

Offshore futures lifted strongly overnight.

  • Chicago wheat March contract up 11 cents per bushel to 530.25c;
  • Kansas wheat March contract up 12c/bu to 442.75c;
  • Minneapolis wheat March contract up 4.75c/bu to 523c;
  • MATIF wheat March contract up €1.25 to €183.25/t;
  • Corn March contract up 6.5c to 377.75c;
  • Soybeans January contract up 4.75c/bu to 898.25c;
  • Winnipeg canola January contract up C$5.60/t to $459.10/t;
  • MATIF rapeseed February contract up €2.75/t to €399.25/t;
  • Brent crude February contract up US$0.48 to $64.20 per barrel;
  • Dow Jones index up 220.75 points to 28132.05 points;
  • AUD stronger at $0.6922;
  • CAD stronger at $1.3160;
  • EUR stronger at $1.1177.

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What a macro session it was – the futures markets have jumped sharply overnight in the US after reports that the US and China are on the way to a limited trade deal.

As best we can tell from the latest reporting, the terms appear to be agreed upon, including a delay of the Dec 15 tariff hikes, though there’s no legal signing yet.

We’ll see if there are any more hiccoughs to come.

Chicago wheat ended up 11¢ to 530.25¢, KC +12¢ to 442.75¢, Minny +4 3/4¢ to 523¢, and Matif was up a euro twenty five to 183.25€ on the earlier close.  Corn picked up six and a half cents to 377.75¢ while beans gained four and three quarters to 898.25¢.  Matif rapeseed picked up 2.75€ to 399.25€ while Winnipeg canola jumped $5.6 to $459.1.  Crude oil is up half a buck to $59.2 WTI /$64.2 Brent and the DOW has gained 221 points.  The dollar index has also firmed slightly on the news, up to 97.4 – the AUD is trading at 69.3¢, the CAD at $1.318, and the EUR at $1.116.

Continuing on the macro front, UK election results are not yet in, but early poll results suggest a larger majority for the Tories.  Still to be seen how Brexit works after this, but the pound is up a few cents to $1.347.

Another big export sales flash also hit this morning, this time for corn with the USDA reporting 1.6 million tonnes (Mt) sold to Mexico, 525,000t of that for next year, and two boats to unknown destinations.

We do note that this was mostly a repeat of last year’s business at this time – when we saw 1.6Mt (541,000t for new season) flashed on December 10.

Regular export sales were slightly higher than expected, with 500,000t for wheat, 870,000t for corn, and 1.05Mt for beans (including four boats to China, three new).

No new Chinese sorghum demand in the mix though.

Australia

Back locally, it was a big day on the ASX yesterday which settled a fraction after seeing over a thousand contracts trade on Jan from $357/t down to $350/t (settling $353.5/t).

Cash December delivered homes continue to show a premium of $10-15/t over the Jan markets as harvest continues but low liquidity of grain coming to the market to fill these slots.

South Australia and Victoria’s harvest get a good run over the weekend before the heat wave kicks in and growers see another round of harvest bans and delays set in with temps scorching into the 40s next week.

There still some good chances of rain into later next week on the GFS, noting that the latest run is mid-update as of writing and hasn’t gotten that far out yet. Fingers crossed.

 

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