Markets

Daily Market Wire 14 June 2019

Lachstock Consulting, June 14, 2019

Grains continued to surge through trading last night amid ongoing concerns about more rain forecast for the US.

  • Chicago wheat up 9.25 cents per bushel to 535.5c;
  • Kansas wheat up 5.5c to 468.25c,
  • Minneapolis wheat up 1.5c to 566.25c,
  • MATIF wheat September contract up €1.50 per tonne to €178.75;
  • Corn up 12c to 442c;
  • Soybeans up 10c to 888c,
  • MATIF rapeseed up €2 to €367.50;
  • Winnipeg canola down C$1/t to $456.5;
  • DOW up 101.94 points to 26,106.77;
  • Crude oil July contract up $1.14 to $52.28;
  • AUD lower at US$0.691;
  • EUR lower at $1.128;
  • CAD steady at $1.333.

Wheat

Torrential rain is back on the radar for mid-next week across the US midwest.  If anything, the weather forecasts have filled in slightly from yesterday’s maps, with a swath from Ohio across Illinois, Indiana and Missouri and into eastern Kansas and Oklahoma all forecast to bring 75-100 millimetres or more of rain.  Harvest results have so far been mostly positive in the southern plains of the US, and include talk that protein, while lower than last year, is better than some expected. However, the start-stop nature of the wheat harvest has made progress slow, and more farmers are getting concerned about being caught in the forecast storms.

Soybeans

While US futures prices continue to rally on weather concerns, news headlines are discussing attempts by Chinese buyers to defer or cancel existing soybean purchases in an attempt to avoid being caught in the middle of the trade war dispute if upcoming talks derail.  In the June USDA World Agricultural Supply and Demand Estimates report released this week, the soybean balance sheet includes a carry-out of more than 1 billion bushels, a new record, which continues to weigh on the back of the scale as traders evaluate weather risk.  On-ground reports remain mixed on crop conditions for already-planted row crops, with some areas showing increased optimism as corn fields dry out and plants start to shoot up. Overall, crop development is heavily delayed and at risk of yield drag.

Europe

Strategie Grains has cut its wheat-production estimate by 1 million tonnes (Mt) to 142.8Mt, noting the dry conditions in parts of southern and eastern Europe.  They have also cut their export estimate, noting that at current levels, Black Sea wheat is outpricing French into elastic markets.  In South America, Argentina’s Rosario Grains Exchange is calling for a new record wheat crop for the crop which will be harvested late 2019, and has put out early estimates of a 22Mt crop, up from 19.5Mt produced last year.

Australia

The Bureau of Meteorology’s (BoM) latest climate outlook predicts mostly dry weather for the next three months, with almost the entire wheat belt at a 30-per-cent or lower chance of exceeding median rainfall.  The BoM has also called for an unseasonably warm winter across almost the entire country.  Dry-sown crops in parts of New South Wales and Queensland have been hoping for some change to the outlook, but not in this direction.

Source: Lachstock Consulting

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