Futures were mixed overnight in quiet trade, settlements as follows;
Wheat markets picked up through the overnight session yesterday and into the start of the day session, but broke back later in the night to give up most of the intra-session gains. Chicago wheat closed up 5¢ to 452.25¢, KC was unchanged at 436.5¢, Minny gained 2¢ to 552.5¢, and MATIF wheat was up €2 to €187.75 per tonne on the earlier close. Corn was up 4¢ to 370¢, beans were off 2¢ to 899¢, and Winnipeg canola bounced C$3/t on the front end to $461. MATIF rapeseed was off €3/t in May to €356.75.
The DOW has continued to trend up slightly, gaining 21 points today, while US oil values have firmed (WTI up 30¢ to 58.55/barrel) and global oil has weakened slightly (Brent off 40¢ to $67.2/barrel). With the overall dollar index up a quarter of a point, the AUD is slightly weaker to 70.6¢, as is the EUR to $1.130 and the CAD to $1.332. More Brexit votes have gone through in Parliament, with today’s motion calling for a delay in the Brexit by three months – something that will still need to be agreed upon by the EU too. Chinese negotiations are also back in the news, with headlines overnight focusing back on Chinese hopes to sign a deal during a previously planned visit to the US by President Xi. This would push back any potential resolution into April.
US export sales figures out today failed to impress on corn and wheat, with wheat at only 263,000t versus ideas closer to 500,000 and corn at 372,000t versus hopes of up to 1 million tonnes (Mt). Destinations brought no real surprise on demand for wheat, with Nigeria and Japan the big takers, though we have noted ongoing business into South East Asia, including more Malaysian demand this week. Bean sales were better than expected, with 1.9Mt, including 1.7Mt to China, but there were no more sorghum sales to China to be seen. Surprise pork sales to China have grabbed the most attention, with some hoping that there will be more to follow amid the African Swine Fever problems.
Floods across parts of the western cornbelt have made for great news photos, and more than a few “ocean-front property” jokes. The Mississippi River is already pushing into flood levels in the south, and COE estimates have it hitting flood levels up towards St Louis this weekend. Heavy winds in the west have also caused damage, blowing trucks over off roads and derailing trains. With the expected planting problems at the back of the mind, Lachstock also notes that more planting surveys came out on US planted area, with Allendale calling for corn area up 3 per cent and bean area down 5pc relative to last year. They also continued to call for more spring wheat acres, up around 242,820 hectares (600,000 acres) year on year.
Spring plantings continue to pick up pace over in the EU and BSEA, with positive conditions there in recent mild weather. Heavy rains are moving across France and Germany in the next couple of days, which will further improve soil-moisture levels. Meanwhile, Strategie Grain has been calling for sharp increases in the EU new-season crops, as has been expected, given adverse weather last season. It is calling for barley up 11pc year-on-year, wheat 15pc, and corn up 3pc. Russia and Ukraine are turning slightly dry, but Russia’s ag ministry has been reporting that some 91pc of its winter crops are in good-to-excellent condition. This is similar to last season at this point, when tough weather came through into April/May and cut back the crop.
The Bureau of Meteorology (BoM) has somewhat improved its seasonal-rainfall outlook by calling for closer to 50/50 changes of exceeding average rainfall across most of New South Wales in April and May. Its outlook maps still indicate exceptional heat, with 75pc or more chances of above-normal maximum temperatures in the same window. The BoM is more optimistic for Western Australia, forecasting a 60pc-plus chance of improved moisture for the southern edge of the wheat belt. Rainfall across Central Queensland has pushed more than 30 millimetres into spots near Emerald already, and with the current storm path, we’re still hoping to see 25-30mm across most of the Darling Downs in southern Queensland. However, we’ve still go no follow-up storms on the extended forecasts for cropping areas though. Domestic markets have been relatively quiet, with the trade sounding out values as they try to evaluate where fair value is and how much liquidity remains available at these levels.
Source: Lachstock Consulting