Daily Market Wire 19 August 2020

Lachstock Consulting, August 19, 2020

Canola was firmer, all other futures were weaker. US dollar again weaker.

  • Chicago wheat December contract down US8.75c/bu to 517.5c;
  • Kansas wheat December contract down 7c/bu to 441.5c;
  • Minneapolis wheat December contract up 1c/bu to 521c;
  • MATIF wheat December contract down €1.75 to €180.75;
  • Corn December contract down 3c/bu to 341.75c;
  • Soybeans November contract down 1.5c to 913.75;
  • Winnipeg canola November up C$1 to C$487.90;
  • MATIF rapeseed November contract up  €4/t to €381.75;
  • Brent crude October contract up US$0.09 per barrel to $45.46;
  • Dow Jones index down 66 points to 27,779;
  • AUD firmer at $0.724;
  • CAD firmer at $1.317;
  • EUR firmer at $1.193.

Market fell

We started the week with a bang, but gave up nearly all of that into today’s early session – although markets did pare back loses slightly later in the session.  Chicago wheat ended down 8 3/4¢ to 517.5¢, KC -7 to 441.5¢, Minny +1¢ to 521¢, and Matif -1.75€ to 180.75€ on the earlier close.  Corn dropped three cents to 341 3/4¢ and beans -1.5¢ to 913 3/4¢ (Matif up four euros to 381.75€, Winnipeg +$1 to $487.9).  Crude oil dropped thirty cents to $42.6 WTI /$ 45.1 Brent and the DOW eased off another 66 points.  Meanwhile, the USD has pushed new lows – the index hitting 92.3 on the close, with the AUD up a tenth to 72.4¢, the CAD $1.317, and the EUR $1.193

Big US row crops

As with Monday’s rally, there’s been no single clear-cut reason for Tuesday’s sell off, but at least this time the market’s been able to spread some blame back to the fundamentals.  The crop tour has continued to come in by a significant degree with “better than average” results in the western corn belt for both beans and corn. Results were up some 10-20pc above averages from recent tours, and there’s been relatively little disputing of their findings.

While we did see more flashed sales they were all beans and corn, 2 boats and 5 boats respectively, and a drop in the bucket compared to ongoing hopes for China buying.  Anyone hanging their hat on rumoured wheat sales the other day was also disappointed.

Weather in the corn belt is also looking more temperate. It’s still on the dry side but conditions are cooler and at this point rainfall is not as critical as it was a few weeks ago.  US crop scout Cordonier was calling for a 180 bu corn yield again, although with slightly lower overall production.

Wheat crop trending bigger

Wheat saw little to excite markets, no China business, nor yet Algeria’s OAIC tender result and global crop ideas continue to trend larger, outside of Argentina.  Spring wheat yields continue to come in from both the US and Canada as harvest blasts along, and it’s hard to find much of anything that has disappointed thus far.  An organization of German farmer groups pegged its winter wheat crop estimate at 21.1 million tonnes (Mt) versus 22.8Mt last year, but no surprises there and harvest is starting to wrap up.  Feed wheat demand is back in the public eye, with more tenders into SE Asia hitting, but as always that’s a drop in the bucket compared with the large crops.


Showers continued across SA with some heavier falls, 20+ mm in parts of the EP, Yorke, and lower north.  Light sprinkles in the Mallee didn’t amount to much (so far) but still were better than nothing.  Local cash markets ticked up $2-3t higher yesterday, following the global moves and despite the AUD currency move, but so far are looking to start today off a little weakert.


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