Markets

Daily Market Wire 18 May 2020

Lachstock Consulting, May 18, 2020

Markets were mixed.

  • Chicago wheat July contract down US2¢/bu to 500.25¢;
  • Kansas wheat July contract up 0.5c to 452.25¢;
  • Minneapolis wheat July contract down 1.75c to 506.25¢;
  • MATIF wheat September contract up €1.50 to €186.50/t;
  • Corn July contract up 1.75c/bu to 319.25¢;
  • Soybeans July contract up 1.5¢/bu to 838.5¢;
  • Winnipeg canola July contract up $C1.60 to $472.30/t;
  • MATIF rapeseed August contract unchanged at €370/t;
  • Brent crude July contract up US$1.37 per barrel to $32.50
  • Dow Jones index up 60 points to 23685;
  • AUD weaker at $0.6429;
  • CAD firmer at $1.4091;
  • EUR firmer at $1.0822.

Markets

In the wheat pits Chicago settled down -2 usc/bu closing at 500.25usc/bu, Kansas was 0.5 usc/bu higher to settle at 452.25usc/bu, while Minni softened -1.75 usc/bu to go out at 506.25usc/bu. Corn usc1.75/bu higher to go out at 319.25usc/bu while Beans were up 1.5 usc/bu to settle at 838.5usc/bu WCE Canola softened 0 CAD/mt closing at 472.3CAD/mt with Matif Canola finishing unchanged at €370/t. In outside markets the Dow Jones gained 60 points at 23685, Crude was up 60.08 bbl the Aussie was 1.64 points higher to settle at 0.64126, the CAD softened -0.0049 while the EUR gained 0.0056.

A few spot fires continue to smoulder away in the international wheat market as concerns around moisture and some cold temps from the EU through to parts of the SRW belt still require a level of risk premium.

French conditions slid another 2pc to 55pc good-to-excellent vs 79pc last year while the Germans also lowered their crop estimate from 22.7 million tonnes (Mt) to 22.4Mt. The amount of the required risk premium is being trimmed however but improving southern hemisphere crop prospects. Both Australia and Argentina are kicking off the season with great moisture. Corn markets have swallowed the reality of a 3.3bbu carryout and have moved on to looking at potential ways to tighten. The most obvious would be lower acres, a fact that won’t be known for a while. On the demand side the US gasoline demand is starting to get ethanol plants back up and running, albeit slowly.

You could be forgiven for having COVID-19 fatigue as you skim over headlines looking for something remotely more interesting, but the virus is still shaping this coming grain marketing season. Reports over the weekend of Russia taking the silver in global confirmed cases certainly has the potential to impact the export supply chain, especially with the case growth in the more remote areas. This will need watching as Russia’s winter crop season gets to the business end.

Australia

Local markets finished the week rebounding slightly across boards. Eastern Australia ASX wheat Jan-21 contract settled on Friday unchanged at $301/t and barley $15.50 firmer at $238.50/t.

The focus this week will be the result of the ongoing barley tariff decision. The Aussie cropping regions are expected to receive some precipitation according to the BOM forecast. This has dissipated somewhat in the southern half of NSW and is now generally concentrated throughout Victoria and South Australia which continue to see favourable conditions. The suspect areas of southern Queensland and northern Western Australia are continuing to show limited falls, the silver lining is that a majority of the Aussie coast lines are showing significant moisture building up and could present some alleviating rainfall in the short term. There is a race to the finish line with sowing prior to this week’s forecast rain.

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