Wheat and oilseed markets closed lower in overnight trading, while corn values were unchanged.
- CBOT wheat down 6 cents per bushel,
- Kansas wheat down 4.5c/bu,
- Minneapolis wheat down 3c/bu,
- MATIF wheat down €1 per tonne,
- CBOT corn unchanged,
- Soybeans down 8c/bu,
- MATIF rapeseed down €1/t,
- Winnipeg canola down C$3/t,
- Dow Jones down 70 points,
- West Texas crude oil down US25c to $51.35 per barrel,
- AUD weaker at 72c,
- CAD unchanged at $1.326,
- Euro nominally stronger at $1.147.
Wheat markets continued to speculate about US and Russian exports, with sentiment in the US shifting towards ideas that there has not been as much business booked recently as hoped. US export inspections, one of the few reports still coming out with the shutdown, were a bit higher than expected on wheat at 550,000t versus market ideas of less than 400,000t. This is still below the levels needed to reach the USDA’s export estimate for 2018-19. We have seen nothing new on Black Sea wheat, but talk that Ukraine may cancel VAT refunds of 20 per cent on exports has popped up again. For now, this is more a story for corn markets and the 2019-20 crops, and could sharply impact Ukraine farm-gate prices, and test the willingness of farmers to sell at lower prices. In the US, snow cover from the recent storm is good across Kansas as it has insulated the crop, but area ideas have continued to drop among the trade, which did not see guiding USDA figures last week because of the continuing government shutdown.
Oilseed markets continue to watch South America, where weather in Brazil is too dry, Argentina is too wet in places, and Paraguay has benefited from some recent rain. Forecasts say Brazil may get some rain shortly, which would benefit its soybean crop. US bean stocks are still huge, with export estimates varying widely, but all looking for a massive growth in US carry-out. This remains dependent on China, and US stocks have come back into the spotlight after lower-than-expected Chinese customs figures were published for December at 5.7 million tonnes (Mt) versus 6.5Mt expected. There are reportedly going to be more talks at the end of the month between the US and China, supporting ideas that China is looking for a deal.
Hot dry weather across the east coast has done a number on pastures and later-planted sorghum crops. Prospects for early planted and harvested crops continue to shine, but ideas for the total Queensland and New South Wales crop size are gradually falling below 2Mt, well below expectations in spring. There have been some large tonnages hitting the market as harvest gathers pace, but concerns exist for later-planted crops.
Source: Lachstock Consulting