Markets

Daily Market Wire 17 July 2020

Lachstock Consulting, July 17, 2020

Wheat futures fell 1pc to 3pc.

  • Chicago wheat September contract down US15.5c/bu to 535.25;
  • Kansas wheat September contract down 10.75c/bu to 448.75;
  • Minneapolis wheat September contract down 12.5c/bu to 515.25;
  • Corn September contract up 4c/bu to 330.25;
  • Soybeans August contract up 7.25c/bu to 893.5;
  • Winnipeg canola November contract up C$1.40/t at C$479.40;
  • MATIF wheat September contract down €1.50/t to €185.75;
  • MATIF rapeseed August contract down €2.75/t to €382.50;
  • Brent crude September contract down US$0.42 per barrel to $43.37;
  • Dow Jones index down 135 points to 26,735;
  • AUD weaker at $0.6971;
  • CAD weaker at $1.3580;
  • EUR weaker at $1.1385.

Chicago wheat flip-flop

Disappointing sales figures on wheat had nothing in them to support previous rumours about Chinese SRW purchases and Chicago fell almost 3 per cent. Row crops saw support from another Chinese beans sale flash with 522,000t to China, 351,000t to unknown destinations but likely China.  US/China trade deal comments have been gradually working their way back into focus. It is tough to do that in a world with coronavirus dominating headlines. The latest comments coming from China yesterday claiming it will stick to deal commitments but also implying it will react to US actions in support of Hong Kong.

In addition to the flash, regular export sales figures from the USDA were released.  The wheat figure was good at 764,000t, compared with ideas closer to half a million, but there was nothing to confirm hopes of SRW sales.  Corn came in slightly on the low side, given all the flashes, at 1.6 million tonnes (Mt) and beans were as expected at 1.1Mt. There was also a new milo boat to China.  Saudi Arabia’s buying agency, SAGO, is back again for barley, with a tender released late yesterday to purchase 12 boats, around 800,000t, Oct/Nov arrival.  At current prices it should price basis Black Sea region execution, but we are watching barley markets into the tender.  Egypt has also started chattering again about how large their wheat supplies are, so it may be about time for a new GASC tender.

Weather mixed

Meanwhile, corn weather remains fairly mild with rain on the outlooks for the eastern corn belt.  Hot temperatures across the corn belt remain a concern to some, but recent moisture and forecasts have taken the edge off most worries.  Some of the milo areas though, have been under severe stress and the absence of any appreciable moisture on the maps will not help anything.  Yield estimates continue to be cut in Argentina given the dryness there, and there is more acceptance coming around of crop losses in Russian spring wheat areas.  These global stories continue to trickle in, but without a major corn problem grain markets have had a hard time holding a rally.

Australia

New season wheat and barley markets were a touch firmer yesterday. Wheat bids were up $3-4/t across the board, offers trying to push a little harder. ASX January 21 wheat settled unchanged at $295/t. Barley markets remained flat for the new crop while old crop picked up $2-3/t.  Western Australia got their much-needed rain with Wongan Hills recording upwards to 20mm and other areas upwards to 30mm, with continued showers to push through today.

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