Markets

Daily Market Wire 15 April 2021

Lachstock Consulting, April 15, 2021

Grains and oilseeds built further gains overnight and US currency weakened again.

  • Chicago wheat May contract up US18.25c/bu to 648c;
  • Kansas wheat May contract up 18.75c/bu to 603.5c;
  • Minneapolis wheat May contract up 12c/bu to 661c;
  • MATIF wheat May contract up €3.25/t to €220.75/t ;
  • Corn May contract up 14c/bu to 594c;
  • Soybeans May contract up 20.5c/bu to 1410c;
  • Winnipeg canola May contract up C$10/t to $827.20;
  • MATIF rapeseed May contract up €1.75/t to €507/t;
  • US dollar index down 0.2 to 91.7;
  • AUD firmer at US$0.772;
  • CAD firmer at $1.252;
  • EUR firmer at $1.198;
  • ASX wheat May contract up $5/t to $286/t;
  • ASX wheat January 2022 up $4.50/t to $297/t.

International

Grains and oilseeds markets made further strong gains overnight, led by demand bulls. Corn was up 14¢ and beans +20.5¢, Matif rapeseed +1.75€ and Winnipeg canola +$10.  Chicago wheat was up 18 1/4¢ and KC up 18 3/4¢, Minneapolis +12¢, Matif wheat +3.25€ nearby and +2.5€ new crop.  Crude oil jumped sharply, up nearly three bucks to $63.2 WTI / $66.6 Brent after larger than expected US stock draws and the DOW gained 54 points.  The USD has slipped another twenty hundredths to 91.7, with the AUD up to 77.2¢, the CA $1.252, and the EUR $1.198.

Comments from the US Fed last night continued to attempt to curb concerns about inflation The Fed repeated expectations for inflation levels to “drift up” but also confirmed they’ll be watching inflation figures to see if they need to tighten monetary policy in coming months, despite earlier comments that they did not expect to do so.

Meanwhile, the mix of the weaker dollar and crude rally is adding to discussions in the market about more commodity inflation potentials into the remainder of the year.

In addition to yesterday’s comments about the E15 blending lawsuit, weekly ethanol production was reported overnight at 941k bpd, down 34k bpd from the prior week. Weekly (implied) gasoline draw rose another two percent and is approaching pre-corona average.

Rumours about Chinese purchases of US winter wheat are back in vogue again with the rally. There’s talk of 5+ cargoes of US and potentially more European wheat sold.  Markets will be closely watching tonight’s flashes to see if anything hit reportable levels, transactions of 100k+ tonnes.

Weather maps are still bringing a solid inch of rain to most of the US HRW belt into the weekend, with the last runs pushing higher totals slightly further to the SW of Kansas, but still light into N Texas.

Brazilian weather maps turning very dry into the 10-15 day ranges, across both central and southern areas, although cooler temperatures may partially help mitigate the stress.

Otherwise, things are fairly quiet in global grains. There’s lots of focus on the new season row crop plantings but still feeling a bit quiet in markets. Old crop is not yet entirely rounded out and new crop demand is limited, the rumoured Chinese wheat buying the exception to prove the rule on that.

Australia

Fairly quiet grain markets locally with the same old stories about logistics and execution still in play. Stocks are slowly starting to tighten up, but exports are also generally fairly well covered on their existing book and focused on turning that over.

Canola markets have firmed some $10-15/t already this week with support from domestic crush and a few export bids on the east coast.

CBH made headlines yesterday with force majeure claims for parts of the Geraldton/Fremantle zones. It’s yet to be seen how significant the impacts are.

The BOM’s adding a little moisture onto the weekend maps for parts of the New England region in NSW and upwards of an inch forecast in some spots between there and adjacent southern Queensland.

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