Markets

Daily Market Wire 18 June 2021

Lachstock Consulting, June 18, 2021

Spring wheat lifted another 2pc. Canola and soybeans fell between 2pc and 3pc.

  • Chicago wheat July contract down US23.75c/bu to 639c;
  • Kansas wheat July  contract down 25.5c/bu to 585.25c;
  • Minneapolis wheat July contract down 9c/bu to 751.25c;
  • MATIF wheat September contract down €2/t to €204.50/t;
  • Corn September contract down 40c/bu to 548.5c;
  • Soybeans September contract down 99c/bu to 1258.5c;
  • Winnipeg canola July contract down C$30/t to $787.10;
  • MATIF rapeseed August contract down €21.25/t to €477/t;
  • US dollar index up 0.5 to 91.9;
  • AUD weaker at US$0.756;
  • CAD weaker at $1.235;
  • EUR weaker at $1.191;
  • ASX wheat July contract down A$1 to $300/t;
  • ASX wheat January 2022 up $1/t to $306/t.

International

Corn and soybeans fell 7-8pc overnight as rain arrived in Iowa. SRW and HRW markets off 4pc.

It was a bloodbath on the boards overnight with losses across nearly every contract as the entire commodity complex took a hit – corn was down limit (40¢), beans a buck (Matif -21.25€, Winnipeg -$30), and macros saw the DOW off 210 points and crude back over a buck to $71.0 WTI / $73.1 Brent.  Wheat contracts saw Chicago off 23 3/4, KC -25.5¢, Matif -2€ on the earlier close, and Minny dragged down nine cents by the rest.  Lean hogs crashed the expanded limits and both cattle contracts were down despite the weaker grain prices.  The USD has jumped nearly two percent since the FOMC meeting, with the index hitting 91.9 – taking the AUD back to 75.5¢, the CAD $1.235, and the EUR $1.191.

Options expiry will occur next Friday and is one to watch given the recent large price moves and outstanding positions.

Corn rains remain on the forecast map, and the confirmation of rains starting to fall in Iowa has built confidence there. Widespread falls of 1-2+” are forecast across the corn belt this weekend with more to come later next week on extended outlooks.

Daily futures limits have been pushed up for tonight’s trading sessions with corn to 60¢ and beans to a buck fifty after today’s large moves.

Ongoing wheat harvest in the southern Plains of the US continues to see fairly reasonable yields with generally good quality. There are no real bull surprises yet to be seen. SRW harvest also so far is seeing good quality, though there are some concerns about upcoming weather impacts.

Another port strike is set for Argentina, though this time it is not ag-specific and is only for 24 hours.  Reportedly striking in protest against slow vaccine rollouts there.

Regular export sales reporting was fairly quiet, with 287,000t wheat, 276,000t corn, and only 6,500t beans after Chinese cancellations.  On the flip side, we did get another flash, a sale of 135,000t soybean meal to The Philippines.

The overall commodity sell-off has left many longs reeling, but the combination of the FOMC change in outlook (inflation driven), Chinese restrictions on trading by commodity houses there, and improved weather forecasts for corn have all collided at the same time in ag markets.

Australia

Local markets wide-eyed this morning after the global move, but nice to see the $A back to US75.5¢, cushioning the impact slightly in $A terms.
Weather maps are continuing to build this moisture outlook back up. There is now a fairly widespread 15-20mm east coast forecast and 15-30mm across the WA wheat belt.

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