Markets

Daily Market Wire 14 February 2020

Lachstock Consulting, February 14, 2020

Futures were mixed, US dollar was firmer

  • Chicago wheat March contract down 3.25 cents per bushel to 544.25c;
  • Kansas wheat March contract down 5c to 466c;
  • Minneapolis wheat March contract down 4.5c to  526.75c;
  • MATIF wheat March contract up €0.25 to €192.75/t;
  • Corn March contract down 3.5c to 379.5c;
  • Soybeans March contract up 3.75c to 896.25c;
  • Winnipeg canola March contract up C$0.40/t to $463.80/t;
  • MATIF rapeseed May contract up €2/t to €399.25/t;
  • Brent crude April contract up US$0.55 per barrel to $56.34;
  • Dow Jones index down 128 points to 29,423;
  • AUD weaker at $0.6718;
  • CAD weaker at $1.365;
  • EUR weaker at $1.0841.

Market news

Market sentiment can swing quickly these days – back off we broke overnight, despite relatively benign news.  Coronavirus remains a concern on the macro front,with new cases and more deaths continuing to be reported.  However, more parts of China are expected to get back to work soon, and ideas on market impacts are reducing.
US export sales figures were largely seen as positive for both corn at 969,000 tonnes and wheat at 643,000t, both on the higher end of expectations, while soybeans more muted at 645,000t, including two cargoes to China, and only a residual adjustment for sorghum.  Markets are still watching and hoping for potential Chinese activity next week, with the US-China trade deal due to take effect tomorrow ahead of the US President’s Day public holiday on Monday. Some position-squaring seems to be in play to reduce risk from short positions in case China steps into the market.
Brazil’s soybean harvest is still behind schedule, but has started to pick up pace and yields remain solid. This has helped to support recent increases in crop estimates.  Similarly, Argentina’s Rosario grain exchange has lifted its soybean crop estimate by 1 million tonnes (Mt) to 55Mt, following favourable weather there and more of the same forecast.  It has also lifted its estimate for Argentina’s corn crop by 1Mt to 50Mt, and a Brazilian agency has pencilled in a 700,000t lift to the safrinha corn crop to take it to 74.7Mt.  More long-range weather outlooks are starting to look warmer than average into the corn planting window in the US, supportive for field work, but pushing a few cautions about summer heat.  Still a long way away, but markets are increasingly looking towards new-crop as spring approaches.

Australia

Australianocal markets have continued to see more liquidity on canola, with parcels being bought up across South Australia and Victoria this week.  Western Australian weather outlooks are starting to show some rain, with latest models showing 5-10 millimetres expected next week.

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