Daily Market Wire 14 September 2020

Lachstock Consulting September 14, 2020

Wheat values eased and row crops firmed in the wake of USDA’s WASDE report.

  • Chicago wheat December contract down US6.25 cents per bushel to 542c;
  • Kansas wheat December contract down 2.75c/bu to 471.25c;
  • Minneapolis wheat December contract down 3.25c at 532.25c;
  • MATIF wheat December contract down €1.25 per tonne to €188.50;
  • Corn December contract up 3.5c/bu to 368.5c;
  • Soybeans November contract up 18.5c/bu to 996c;
  • Winnipeg canola November up C$7.60 to $517.40;
  • MATIF rapeseed November contract up €3.25/t to €382.25;
  • Brent crude November contract down US$0.13 per barrel to $39.83;
  • Dow Jones index up 132 points to 27,666;
  • AUD higher at $0.72819;
  • CAD lower at $1.31842;
  • EUR higher at $1.18472.

Global Highlights:

USDA’s World Agricultural Supply and Demand Estimates (WASDE) report out Friday failed to give the wheat balances much, with old-crop US wheat basically unchanged thanks to a small drop in Soft Red Winter wheat exports offset by a matching increase in Hard Red Winter wheat exports.

On the global front, September WASDE left Russian production unchanged at 78 million tonnes (Mt), which was a shock. The other curve ball was a small increase in EU production from 135.5Mt to 136.15Mt.  There is still plenty of room for adjustments in the global sheets, with the USDA pegging China wheat imports at 7Mt, which looks a little light given current pace. Other global changes were a 2.5Mt lift for Australia to 28.5Mt, a 1Mt cut for Argentina to 19.5mmt, and a 2Mt increase for Canada to 36Mt. Total ending stocks are forecast up 2.6Mt at 319.4Mt.

On corn, USDA trimmed US carryout to be closer to the average trade guess. Friday’ trading was focused on the China import number which was left at 7Mt. Given the US has already sent close to 9Mt, this makes the number look pretty baffling. For context, many in the trade suggest China could import 15-20Mt of corn this marketing year. Friday’s soybean market largely ignored the USDA report, and focused on a market that is seemingly understating demand.

All up, September WASDE was a fizzer for wheat, but not largely unexpected. Row-crop markets simply don’t believe USDA, with the market reaction clearly indicating that balance sheets get tighter than the US Government’s best guesstimate.


New-crop wheat markets lost ground on Friday afternoon, with local futures trading lower by $3-4/t, and the ASX January East Coast wheat contract settling at $288/t. New-crop grower bids held and finished Friday relatively unchanged , while canola was softer again by $1-2/t along the east coast, and dropped $5-6/t over the week.

South Australia’s South East and parts of Victoria received good rain over the weekend, with Victoria’s Western District getting up to 25mm . The Bureau of Meteorology’s eight-day forecast looks positive for SA’s Eyre Peninsula with 15-25mm.

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