Markets

Daily Market Wire 18 July 2019

Lachstock Consulting, July 18, 2019

Wheat futures settled slightly lower, US soybeans were 1 1/2 per cent down.

  • Chicago wheat September contract down 2 cents per bushel to 505.5c
  • Kansas wheat September contract down 4.5c to 441.75c,
  • Minneapolis wheat September contract down 2.5c to 527.75c,
  • MATIF wheat September contract up €1.25 per tonne to €175.75;
  • Corn September contract up 0.75c to 436c;
  • Soybeans August contract down 5.25c to 882.5c;
  • Winnipeg canola November contract down C$1.20/t to $444.10;
  • MATIF rapeseed August contract up €1.50 to €374.50; a new high;
  • Brent crude September contract down $0.69 per barrel to $63.66;
  • Dow Jones down 115.78 points to 27,219.85;
  • AUD unchanged at US$0.7010c;
  • CAD strengthened to $1.305;
  • EUR strengthened to $1.123;

Market summary

Grains continued to gradually slip lower overnight in the US, with Chicago wheat off two cents to 505.5¢, KC -4.5¢ to 441 ¾¢, Minny -2.5¢ to 527 ¾¢, and Matif wheat +1 ¼€ to 176 ¾€ on the earlier close.  Corn picked up ¾¢ to 436¢ while beans gave up 5.25¢ to 882.5¢ (Winnipeg canola -$1.2 to $444.1, Matif +1.5€ to 374.5€ – a new high).  Crude oil continued to sell off after word that a US senator will be meeting with Iranian politicians in an attempt to ease tensions – WTI off 84¢ to $56.5, Brent off 69¢ to $63.66, while the DOW dropped 116 points.  The AUD is holding steady around 70.1¢, the CAD at $1.305, and the EUR at $1.123.

Tender results off GASC the other day saw Ukrainian FOB values just under US$200/t and Russian in the low $200s/t, but only one vessel booked (Russian – helped by a cheap freight offer) at a ~$216/t C&F.  Following up on semi-political announcements by the Russian Ag Ministry that they intend to increase grain production by nearly 30pc in the next twenty-five years, the Russian Grain Union (a local lobbying group) has announced that they see wheat exports potentially hitting 40 million tonnes (Mt) … well above other estimates (given the lower crop) and raising some eyebrows in the trade.  Meanwhile, early harvest results in northern France continue to show good yields and quality (benefiting from the dry finish), although there is more talk about stress on the corn crops there with irrigated field suffering amid expanding water use restrictions.  EU rapeseed crops also remain a concern (off the back of lower acres), and a private analyst group was out estimating imports up >1Mt vs last year to fill crush needs.  This shortage has been a driving force behind the Winnipeg/Matif spreads for the last few months, although there is increasing talk about Canadian seed working in despite the GM problems.

Cooler and drier weather continues to be the trend in weather outlooks for the US corn belt, raising some hopes for row crops (although there are still widespread concerns about the impacts on pollination and flowering from this more recent heat).  There was some talk early in the session regarding claims by supposedly “reliable sources” that prevent plant (PP) acres were already confirmed at nearly 10 million.  The overall numbers are not much of a surprise though arguably slightly above expectations for corn, but without any supporting evidence the market has mostly shrugged off the claims.  On a more negative note demand side, China’s apparently seeing yet another new ASF outbreak – small reported culls, but raising concerns that larger unreported losses may be continuing.  As mentioned the other day, published data there is always somewhat suspect.

Australia

WA rains have remained light so far, with only limited drizzle across the central wheat belt – but still looking for a widespread 15-20+ mm into the weekend.  Still nothing on the east coast radar, though, as much as we hate to say it yet again..

Source: Lachstock Consulting

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