Markets

Daily Market Wire 16 June 2020

Lachstock Consulting, June 16, 2020

Moves were mixed in grain and oilseed contracts overnight, with financial markets more the focus.

  • Chicago wheat July contract up US2.75 cents per bushel to 504.75c;
  • Kansas wheat July contract down 2.75c lower to 445.75c;
  • Minneapolis wheat July contract up 1.75c to 515c;
  • Corn July contract down 0.75c to 329.25c;
  • Soybeans July contract down 2.25c to 869c;
  • Winnipeg canola July contract up C$1.80 per tonne to $471.20;
  • MATIF wheat September contract  down €2/t to €181.25;
  • MATIF rapeseed August contract  down €2/t to €375.75;
  • Brent crude August contract  up US$0.99 per barrel to $39.72;
  • Dow Jones index up 158 points to 25,763;
  • AUD higher at US$0.6914;
  • CAD lower at $1.3568;
  • EUR higher at $1.1324.

Markets

USDA has pegged the US wheat crop as 15 per cent harvested, and lowered the good-to-excellent rating by 1pc to 50pc. On corn, 95pc of the US crop has emerged, and 71pc is rated good to excellent, down from  75pc last week. Soybeans are 93pc planted, and spring wheat is 4pc headed. Conditions are getting a little dry in parts of the corn belt, and this supports the fall in the crop rating. US sorghum is rated at 48pc good to excellent, and this figures fallen 16pc in the past two weeks. With the all-important 30 June stocks and acreage report getting closer, many private analysts are starting to have their say on planted area. Informa announced its corn planting forecast is 1.17 million hectares below the latest USDA guestimate. All else being equal, that would take the carry-out from an eye-watering 84.4M tonnes (3.323 billion bushels) to a less painful 72.1Mt (2.84bbu); that’s still heavy, but would certainly add some support to current values. On the flipside, Informa reallocated what area corn lost mainly into soybeans.
US equity markets rebounded as the Federal Reserve announced it was on a buying spree, and expanding its purchasing program to include more corporate bonds in the secondary market. This is a clear indication that the Fed will stop at no lengths to provide liquidity, despite markets seemingly shaking off domestic and global disturbances.  The spin-off was another round of USD selling, which lifted the AUD back above US69c. Technically, the AUD’s rejection of the recent low is supportive to a push higher. Charts suggest a push above 70c seems likely although, as the old saying goes, every ship that sank had a chart room.

Australia

Currency moves have pushed local prices all over the place.  As the Aussie dollar strengthened, bids eased by AU$3-4/t on new crop. Old-crop still trades for bits and pieces, and yesterday the market saw WA barley traded at around $260/t free in store on Clear Grain Exchange. Trade on the ASX platform was quiet; on east-coast contracts, July wheat traded at $332/t, with January wheat at $298/t and barley at $232/t. Growing conditions continue to strengthen on recent rainfall, and the next round of forecast rain is expected to arrive over the weekend.
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