Markets

Daily Market Wire 16 October 2020

Lachstock Consulting, October 16, 2020

Grain markets gains strongly

Wheat markets blew up overnight with justifications attributed to the ongoing weather worries around the world but nothing substantially new yet seen – Chicago wheat closed +21.5¢ to 618 1/4¢, KC +22 3/4¢ to 558¢, Minny +12 3/4¢ to 558 3/4¢, and Matif up 3.25€ on the earlier close.  Corn rode on wheat’s coattails to pick up 7 1/4¢ and beans gained 6¢ (Matif and winnipeg were down 1.25€ and $0.8 respectively).   The USD has picked up sharply too, with the dollar index trading to 93.8 (+0.5), the AUD, the CAD and the EUR all weaker.

  • Chicago wheat December contract up US21.5 cents per bushel to 618.25c;
  • Kansas wheat December contract up 22.75c/bu to 558c;
  • Minneapolis wheat December contract up 12.75c/bu to 558.75c;
  • MATIF wheat December contract up €3.25 per tonne to €206.75;
  • Corn December contract up 7.25c/bu to 403.75c;
  • Soybeans November contract up 6c/bu to 1062.25c;
  • Winnipeg canola November down C$0.80/t to $525.40;
  • MATIF rapeseed November contract down €1.25/t to €389;
  • Brent crude November contract down US$0.16 per barrel to $43.16;
  • Dow Jones index down 20 points to 28,494;
  • AUD weaker at $0.709;
  • CAD weaker at $1.322;
  • EUR weaker at $1.171.

International

    • Wheat weather worries are still mostly focused on the very dry new crop sowing conditions in the Black Sea region and the US HRW areas, but a renewed focus on Argentina overnight after Rosario cut its crop estimate by another million tonnes (Mt) to 17Mt.

     

    • Weather maps are still calling for some moisture into southern Russia next week, but the models look to be shifting slightly drier in some runs and there’s been no fill-in for the Volga and surrounding areas.
    • US maps have also turned drier again across HRW areas, with some shift westward to the predicted rain but overall, far lighter coverage in today’s runs.  We’re still a way from realizing it, but it’s not been taken as a positive trend.  There are some harvest concerns with this storm for the corn belt, but field work has been moving rapidly there in an attempt to beat the weather.
    • Brazilian weather maps meanwhile continue to look beautiful for beans, with widespread forecasts of 50+ mm across much of the area there

     

    • NOPA (National Oilseed Processors’ Association) crush figures were out overnight, delayed by the Monday holiday. At 161.6 mbu it’s the biggest figure in September on record, and bean oil stocks remained tight.

     

    • EIA (Government of US, Energy Information Administration) ethanol production was out up 1.5pc week on week, though stocks were also up nearly 2pc
    • Flash sales pegged another 261,000t of Chinese bean buying

     

Australia

    • Rain forecast for NSW will pull up any harvest progress until early next week. The late rain will be welcome in Riverina & southern border regions to help finish wheat crop growth
    • Markets were mostly unchanged apart from WA where oilseeds firmed again in the lead up to harvest
    • Yields continue to surprise to the upside in the northern parts of NSW. We are expecting this trend to be sustained as we push south
    • Generally harvest is pushing 2 weeks late, building potential for a short term squeeze in the lead into harvest. Watch this space.

 

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