Markets

Daily Market Wire 15 June 2022

Lachstock Consulting, June 15, 2022

US wheat markets eased 1-2pc. Canola and rapeseed firmed 1pc. The oilseeds complex eased again and Brent crude settled 1pc lower.

  • Chicago wheat July contract down US20.75 cents per bushel to 1050.25c/bu;
  • Kansas wheat July contract down 19.5c/bu to 1142.25c/bu;
  • Minneapolis wheat July contract down 13.25c/bu to 1208.5c/bu;
  • MATIF wheat September contract down €2.25/t to €392.25/t;
  • Black Sea wheat July contract down $0.25/t to $410/t;
  • Corn July contract down 1c/bu to 768.25c/bu;
  • Soybeans July contract down 9c/bu to 1698.5c/bu;
  • Winnipeg canola November 2022 contract up C$15.80/t at $1044.40/t;
  • MATIF rapeseed November 2022 contract up €9/t to €769/t;
  • ASX July 2022 wheat contract up A$5/t to $465/t;
  • ASX Jan 2023 wheat contract up $5/t to $475/t;
  • AUD dollar weaker at US$0.688.

International

Grains seem to be taking the back seat to the wider macro sell off. The realisation of the inflation environment and subsequent impact on liquidity is a significant input from a grain trader’s perspective. Consumers suffer from the same impacts but have the luxury at the moment that markets are bleeding and they are happy with current coverage levels. The fact the USDA has pencilled in 50 million tonnes (Mt) of exports from Russia and the Ukraine which, given the favourable crop conditions in Russia seems plausible however this is not a normal year.

There are some weather concerns around the globe. Not one is significant enough to alter price direction but all warrant watching. Weather is very hot in Europe, particularly in Spain and France. Argentian needs a drink and the US Hard Red Spring wheat area is not in great shape. We are in the hitting zone now for the mid-season row crop weather markets to start to kick in. The US Midwest and Delta will be hot this week and will start to get people excited.

Global currency moves will have a big influence if and when the consumer comes back to the table. Wheat is a classic with SRW/French and Russian all priced competitively. The Ruble is strong, via a bunch of govt intervention but it will have bearing on what the Russian grower is going to do. The Russian export tax regime is still in place and has kicked off just over US$10/t for new crop.

The Baltic Exchange freight index retreated to 2-month lows.

Crude oil prices are trending firmer. Not only did OPEC not lift production as agreed for the month of May, but production actually decreased, according to OPEC’s latest Monthly Oil Market Report released on Tuesday.

Australia

Australian markets came back after the long weekend, starting sluggishly but wheat bids firmed later in current crop Victorian and Western Australian. Victorian protein wheat was in demand. ASW1 and SFW1 delivered Geelong/Melbourne also firmed by $5-6/t for deliveries July plus carry. The softer AUD assisted with new crop bids with Vic track holding around $470/t while APWMG contracts in WA were bid $500/t KWI port zone. Barley was relatively unchanged and canola was down $20-30/t in new and old crop.

The 8-day forecast has rain pencilled in for all states except Qld. Totals are expected to be below 5mm for northern NSW and between 5-15mm for southern NSW. Most of Vic, SA and WA are forecast to receive between 10-25m.

 

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