Daily Market Wire 13 October 2023

Lachstock Consulting, October 13, 2023

USDA October reports were published at lunchtime sparking a  soy complex rally which flowed to other markets in afternoon trade. Nearby soybeans screamed 37.5usc/bu higher and soybean meal December futures added USD$15.80/st, about 4 percent. Wheat and corn firmed. The US dollar index firmed.

  • Chicago wheat December up US15.5c/bu to 571.5c/bu;
  • Kansas wheat December up 7.75c/bu to 675c/bu;
  • Minneapolis wheat December up 5.25c/bu to 723.5c/bu;
  • MATIF wheat December up €2.25/t to €233.25/t;
  • Black Sea wheat has not quoted since 11 August;
  • Corn December up 8c/bu to 496c/bu;
  • Soybeans May 2024 up 34c/bu to 1332c/bu;
  • Winnipeg canola November up C$9.90/t to C$712.60/t;
  • Winnipeg canola May 2024 up C$7.50/t to $724.50/t
  • MATIF rapeseed November 2023 up €3.50/t to €415/t;
  • MATIF rapeseed May 2024 up €2/t to €439.75/t;
  • ASX January 2024 wheat down A$9/t to $390/t;
  • ASX January 2024 barley down A$5/t to $340/t;
  • AUD dollar down 100 points to US$0.6314


Historically the Oct report can be a crap shoot, difficult to anticipate the outcome. Leading into the report most pundits were complacent which proved to be inaccurate. 

–  US corn yield was 173b/ac (down 0.5bpa from last report), beans 49.6bpa, down 0.3bpa.  

– US wheat increased ending stocks – 615mbu last report to 670mbu in the Oct numbers. This was mainly in yield with the USDA predicting 48.6bpa, compared with 45.8bpa previously. The ending stocks increase was mainly in HRW and HRS.  

– World wheat balances were close to unchanged. USDA cut Australia production from 26Mt to 24.5Mt (unusually aggressive), Kazakhstan was up 2Mt (13Mt to 15Mt) while the US yield at 49.31Mt was up from 47.2Mt previously.  

– World corn ending stocks went from 313.99Mt to 312.40Mt. Brazil production was unchanged at 129Mt, Argy was 55Mt, up from 54Mt, while the US was 382.65Mt, down from 384.42Mt.  

– Lower world beans ending stock, at 115.62Mt, down from 119.25Mt was the driver of a price rally. Argy unchanged at 48Mt, Brazil unchanged at 163Mt and the US at 111.70Mt was down from 112.84Mt. China crush was up a tickle, Brazil beginning stocks were revised down, as was China. 

US consumer prices advanced for a second month putting the fork in any rate cut ideas. Excluding food and energy, CPI increased 0.3pc in Sept. Core inflation (includes food and energy) increased 0.4pc, driven mainly by fuel. This drove the US dollar index higher and subsequently the Australian dollar fell back to the lower end of the range. It is results season for the banks in the US; JPMorgan, Citigroup and Wells Fargo will announce third quarter results tomorrow.


Local markets saw some big moves in the cash, especially in Victoria. It is no coincidence that the GIAV crop tour was taking place this week. Vic wheat and barley has fallen around $20/t for the week based on grower port bids. We will get the official take on the tour next week, but early indications suggest Vic is in exceptionally good shape. Wheat and barley yield potential is looking above average. Interesting that the USDA has moved its estimate of the Australian wheat crop down to 24.5Mt; probably in line with the average trade guess but it is a pretty aggressive move for USDA. Western Australian weather has been scorching over the last 3 weeks so maybe the USDA model is moving WA down fast. Queensland’s Darling Downs prices didn’t really move but, fair to say, we didn’t see much in the way of volume. Downs wheat would be still circa $470/t Jan while barley maybe $460/t; with the move in Vic over the last week, upcountry values start to calculate into this supply chain. Freight rates of around 8 cents per tonne per kilometre would move the northern accumulation line down to the Murray River. However, before the Qld feeder gets excited yesterday saw the return of the exporter bidding in Vic. It smelt like China wheat demand, numbers would suggest that the export margin is back open post the break so the market is doing the work to define the inflection point where the exporter overtakes the domestic feeder.


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