Markets

Daily Market Wire 16 July 2019

Lachstock Consulting, July 16, 2019

Grains and oilseeds futures were mostly weaker on Monday.

  • Chicago wheat September contract down 15.25 cents per bushel to 507.75c
  • Kansas wheat September contract down 18.25c to 449c,
  • Minneapolis wheat September contract up 10.25c to 532.5c,
  • MATIF wheat September contract down €1.50 per tonne to €176.75;
  • Corn September contract down 13.25c to 441c;
  • Soybeans August contract down 11.5c to 901.75c;
  • Winnipeg canola November contract down C$3.80/t to $446.90;
  • MATIF rapeseed August contract up €0.25 to €370.5;
  • Brent crude September contract down $0.24 per barrel to $66.48;
  • Dow Jones up 23.17 points to 27,359.16;
  • AUD strengthened to US$0.7036c;
  • CAD weakened to $1.3055;
  • EUR weakened to $1.1259;

Market summary

Grain markets broke off hard across the board overnight with little new news seen to support the post-report rally, with Chicago wheat down 15 ¼¢ to 507 ¾¢, KC -18 ¼¢ to 449¢, Minny -10 ¼¢ to 532.5¢, and Matif -1.5€ to 176 ¾ on the earlier close.  Corn gave up 13 ¼¢ to 441¢ and beans were off 11.5¢ to 901 ¾¢ (Matif rapeseed up a quarter of a euro to 370.5€, and Winnipeg canola -$3.8 to $446.9).  Non-ag commodities were also down, with crude oil back 63¢ to $59.6 on WTI ($66.5 Brent), copper off half a percent,  although gold was up a tenth of a percent and the DOW picked up 27 points.  The AUD is trading stronger again, up to 70.4¢, the CAD at $1.305 (slightly weaker), and the EUR at $1.126.

US row crops improve

 Crop progress figures out in the US showed both corn and bean conditions up 1pc good/excellent, with significant improvements in much of the central corn belt (particularly in Illinois for both crops).  Meanwhile, following this week’s heat wave, there has been some cooling of the extended forecasts for the central corn belt, though still to be seen how this realizes – and the impacts on row crops with corn pollinating (silking was at 17pc nationally, and beans 22pc bloomed).  Winter wheat harvest picked up to 57pc, though still well below 71pc recent average.  Export inspections were also out, with corn figures much as expected at 676,000t and beans stronger than most had expected (at 854,000t) with almost 460,000t to China.  Wheat inspections came in on the lower end of estimates, with only 315 ,000t and no surprise business (although there was one Algerian boat – though they had been on the outstanding sales report for a while now).  On that note, we were surprised to see a corruption case in Algeria result in the suspension of OAIC’s (the national grain agency) chief and reports that they were shutting some 45 mills in related cases – though Lachstock doubts there will be any significant downside to demand from this.

Chinese pork production figures suggested that they produced 5.5pc less pork (vs last year) in the first half of 2019, although there are ongoing questions about the accuracy of the data (with two separate figures reporting varying reductions in the herd – ~26pc down in figures from the Ministry of Agriculture, vs 15pc down in figures from the Statistics Bureau).  As is the case with  many Chinese figures, the markets will continue to debate (and in many cases doubt) the accuracy of such conflicting figures from the Chinese government.  The macro world was also somewhat shocked by the Chinese GDP figures, which were published with the lowest growth in 27 years – not a supportive factor for soybean/mean demand growth.

Australia

Still no moisture to be seen on the extended weather maps for the east coast.

Source: Lachstock Consulting

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