Markets

Daily Market Wire 17 March 2020

Lachstock Consulting, March 17, 2020

Market were mostly lower

  • Chicago wheat May contract down US8¢/bu to 498¢;
  • Kansas wheat May contract down 7.75c to 423.75¢;
  • Minneapolis wheat May contract up 1.75¢ to 509.75¢;
  • MATIF wheat May contract down €2.25/t to €175.25/t;
  • Corn May contract down 11c/bu to 354.75¢;
  • Soybeans May contract down 27¢/bu to 821.75¢;
  • Winnipeg canola May contract down C$5.60/t to $448/t;
  • MATIF rapeseed May contract down €17/t to €335.5/t;
  • Brent crude May contract down US$4.32 per barrel to $29.53;
  • Dow Jones index down 2997 points to 20188;
  • AUD weaker at $0.6113;
  • CAD weaker at $1.4013;
  • EUR firmer at $1.1175.

Market news

There’s been no standing in front of the sell side wave – markets continued to break off hard across the board with continued fears about the coronavirus situation and contagion. The DOW set another new downside record, ending down nearly three thousand points (-2997 close, although it was “up” mid-session and only down ~1500 for a few minutes) and crude oil continued to collapse with WTI pushing under $30 (29.2 currently)/Brent $30.1.  Cattle markets took the brunt of the hit on ags today with both live and feeder down limit in early trading (and hogs close), although row crops were a close second, corn dropping 11¢ to 354 3/4¢ and beans -27¢ to 821 3/4¢.  Wheat’s sell off continued in a more muted fashion, with Chicago closing -8¢ to 498¢, KC -7 3/4¢ to 423 3/4¢, Minny +1 3/4¢ to 509 3/4¢, and Matif -2.25€ to 175.25€ on the earlier close.  FX markets remain very volatile with the AUD back down to 61.1¢, the CAD $1.399, and the EUR $1.116.What can we say about the coronavirus situation that hasn’t already been said?  There are some significant real concerns about the economic impacts and slowdowns associated with fighting the pandemic, but at the same time the current markets continue to be more emotionally driven than anything.  Markets are well aware that eventually the world will come out of this situation, but the uncertainty about how the infection rates will progress and how severe the economic restrictions leads to an excess of caution.  Once the infection rates start to taper off there is plenty of liquidity there to attempt to front run the economic recovery, but the large unknown now is when that may be.

Ag news has been relatively quiet, with the ongoing focus on the macro melt down – but we did see US inspections out overnight.  Corn figures were slightly on the positive end at 978,000t, while wheat and beans were more neutral at 450,000t/436,000t respectively.  Sorghum did see one of the recent sales ship to China, and there was a durum boat loading to Italy, finally!

Tunisia has another durum tender in the mix this week – be interesting to see how that prices out as worries about the North African and Italian crops continue.

On the export sales note, there’s some talk about force majeure starting to crop up with the coronavirus situation.  It’s been a worry for a few weeks, but still to see if it becomes a significant event.

Australia

Back locally, field preparation continues for new season plantings and many are working to get in their last fall sprays.  Chemical shortages are becoming a persistent problem though, and there are some questions being raised about weedy paddocks going into planting.  Everyone is champing at the bit to get into the field and moving, but we’re still about a month away from really getting moving across the country on grains. A few outliers intend to move later this month, which would be exceptionally early.

The forecast maps have filled in a little more for southern WA into earlier next week, but otherwise we’re sitting dry – good for field work, but everyone would like to see another shower to tie moisture together prior to plant.

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