Markets

Daily Market Wire 14 November 2022

Lachstock Consulting, November 14, 2022

US grain markets closed higher in Friday trading while US currency eased again.  Brent crude gained 2pc.  The Dow Jones Industrials Average was little changed after its Thursday 4pc gain.

  • Chicago wheat December contract up US10.25 cents per bushel to 813.75c/bu;
  • Kansas wheat December contract up 18.25c/bu at 943.5c/bu;
  • Minneapolis wheat December contract up 14.25c/bu to 945.75c/bu;
  • MATIF wheat December contract unchanged at €327.25/t;
  • Black Sea wheat December contract up US$0.50/t to $318/t;
  • Corn December contract up 4.75c/bu to 658c/bu;
  • Soybeans March 2023 contract up 26.75/bu to 1453.75c/bu;
  • Winnipeg canola March 2023 contract was unchanged at C$878/t;
  • MATIF rapeseed February 2023 contract down €0.75/t to  €636.25/t;
  • ASX Jan 2023 wheat contract down $A8/t to $465/t ;
  • ASX Jan 2023 barley contract unchanged at A$338/t;
  • AUD dollar firmer at US$0.663.

International

A Kremlin spokesman said negotiations and contacts were continuing, but there was no agreement yet as officials from Russia and the United Nations met in Geneva on Friday to discuss a possible extension of the Ukraine grain-export corridorl. Russia’s agricultural exports have not been directly targeted by western sanctions, but Moscow said blocks on Russia’s payments, logistics and insurance industries were a barrier to Russia being able to export its grain and fertiliser.

The UN, Ukraine and Turkey have said they plan to continue the grain-export initiative after November 19, even if Russia is not part of it.

Commodities mostly climbed after China announced some easing of its strict Covid Zero measures. Among other things, this means people entering the country can spend shorter periods in quarantine after entering the country, potentially boosting the outlook for a recovery in Chinese demand.

The Rosario Grains Exchange (BCR) said on Friday that Argentina’s wheat exports this season will be around half of last season’s at 7 million tonnes (Mt), after months of dry weather have halved the 2022-23 production outlook.

Soaring wheat prices in India could prompt price-cooling measures such as the release of state reserves into the open market and removal of the 40pc tax on imports, trade and government sources said on Thursday.  Indian farmers have reportedly planted 4.52 million hectares of wheat as of Friday, an increase of 7pc year on year, according to the farm ministry

World Weather Inc. says La Niña will begin an accelerated weakening trend by the Northern Hemisphere mid-winter. The biggest impact for the US should be in the Plains, where an increase in late-winter and early spring precipitation is likely. The reduced La Niña influence should also result in better precipitation opportunities across the northern US and Canadian Prairies.

Egypt’s state grain buyer bought 280,000t of Russian wheat in private negotiations on Thursday for US$362.50, bringing its total purchases for 2022-23 to at least 3.19Mt.

South Korea purchased 69,000t of optional-origin corn and passed on another tender to buy up to 68,000t of the same.

Japan purchased 94,603t of wheat in its weekly tender, including 62,423mmt of US and 32,180t of Canadian wheat.

Indonesia purchased 60,000t of US milling wheat and 60,000t of Canadian milling wheat.

Australia

The market is focused on the impact of what this latest weather event has done across New South Wales, Victoria and South Australia over the weekend. The market has plenty of bids, and very few grower offers along the east coast at present, and this is expected to be the case throughout the week.

Weekend rainfall totals were massive, and came with damaging winds. Up to 100 millimetres fell between 9pm and midnight last night in central west NSW, which has resulted in flash flooding in towns including Canowindra, Molong and Eugowra. At 9am today, there were 15 emergency warnings in place. There are currently 65,000 homes and businesses without electricity in SA after Saturday’s wild storms. Massive rainfall totals have also smashed north-east Victoria, with a number of flood warnings in place. The forecast is for rain to start to clear today before returning on Friday. The question now is how much more adverse weather crops can take without significant yield and quality losses.

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