Corn and spring wheat lifted in an otherwise downward Tuesday market.
- Chicago wheat July contract down US13c/bu to 661.5c;
- Kansas wheat July contract down 15.25c/bu to 612.75c;
- Minneapolis wheat July contract up 1.25c/bu to 747.75c;
- MATIF wheat September contract down €3.25/t to €205.75/t;
- Corn July contract up 8.25c/bu to 667.5c;
- Soybeans July contract down 6.5c/bu to 1465.75c;
- Winnipeg canola July contract down C$7.80/t to $845.90;
- MATIF rapeseed August contract down €1.75/t to €508/t;
- US dollar index unchanged at 90.5;
- AUD firmer at US$0.769;
- CAD weaker at $1.218;
- EUR firmer at $1.213;
- ASX wheat July contract down A$3 to $302/t;
- ASX wheat January 2022 down $3/t to $306/t.
Prices were weaker across the grains sector again overnight with continued pressure from the rain forecasts across the US corn belt. Sept corn was off 6 3/4¢ and beans -22 1/4¢ (Matif -1.75€ and Winnipeg -$3.4). Wheat was back 13¢ on Chicago, -15 1/4¢ on KC, +1 1/4¢ on Minny (back up after earlier session lows), and -3.25€ on Matif with the earlier close. Crude oil has firmed another buck or so to $72.5 WTI / $74 Brent after the draw down in US stocks and the DOW gave up 94 points. On the FX side, the AUD is trading at 76.8¢, the CAD $1.218, and the EUR $1.212 (with the dxy around 90.5).
Options expiry will occur next Friday and is one to watch given the recent large price moves and outstanding positions.
The US Federal Reserve, Federal Open Market Committee (FOMC) meeting results will be reported late tonight, tomorrow US time. Few people expect FOMC to change interest rates yet but there are some ideas that they may update their outlooks given inflationary concerns.
Coronavirus restrictions continue to lift across US states, with New York and California both removing their restrictions last night. The UK extended its restrictions over concerns about the Indian variant. Post corona demand continues to support market optimism on the macro side, but still a bumpy road heading up.
US NOPA soybean crush in May was 163.5 mbu, slightly below most estimates, with correspondingly tighter oil stocks reported.
Egypt’s GASC cancelled their wheat tender after a weak showing on the freight side, so it’s assumed GASC will retender later this week or early next. Offers of French wheat were in the US$260s per tonne free on board (fob), Ukraine low $250s/t fob and Russia offers were in the low-to-high $250s per tonne fob.
Big rains are set to hit the US Delta later this week, with 5+ inches across New Orleans expected to bring some short-term loading delays, but boosting hopes for dryland cotton in the south.
At the same time, the latest runs are putting a widespread 1-2″ across the central Corn Belt with almost all of Iowa, Illinois, southern Minnesota, and Indian/Ohio benefitting. These are weather markets indeed for row crops.
No substantial rain is forecast for the southern Plains and HRW areas though. Harvest is pushing into southern Kansas and more yield reports are expected later this week.
Firmer US cattle markets benefitted from both the weaker grain complex and the continued absence of any deliveries.
There’s some talk from oil traders to start this week about a return to US$100/barrel crude has drawn headlines, justifying those ideas on the back of a potential slowdown in production combined with higher demand post-corona.
Black Sea markets still reportedly were under pressure with harvest rapidly approaching, though after recent weather there are some ideas of a slow start. Yield ideas are still fairly optimistic after the recent moisture, and with a little more on the forecasts.
Australia’s Reserve Bank left the interest rate unchanged, at 0.1pc, as expected. They continued to focus on hopes for a return to full employment as an indicator for future policy.
Central Victoria received 10-15mm rain yesterday, and scattered showers are forecast to fall over the next few days.
Local markets were slightly weaker yesterday with some pressure from the weaker boards, but in general the bid/ask spreads were wide, and the volume traded was limited.
Crops in the South East continue to benefit from the recent rains, though coverage is still patchy.
Source: Lachstock Consulting