Markets

Daily Market Wire 19 February 2021

Lachstock Consulting, February 19, 2021

Wheat strengthened, US dollar weakened.

  • Chicago wheat March contract up 18.5c/bu to 662.5;
  • Kansas wheat March contract up 12.25c/bu to 626.75;
  • Minneapolis wheat March contract up 8.75c/bu to 631.75;
  • MATIF wheat March contract up €8.50/t to €237.50/t;
  • Corn March contract down 2.75c/bu to 550.25;
  • Soybeans March contract down 8.75c/bu to 1375;
  • Winnipeg canola March contract down C$2.60/t to $750.90;
  • MATIF rapeseed May contract up €1.50/t to €460;
  • Brent crude April up US$0.99 per barrel to $64.34;
  • Dow Jones index down 120 to 31493;
  • US dollar index down 0.4 to 90.6
  • AUD firmer at $0.777;
  • CAD firmer at $1.268;
  • EUR firmer at $1.209

International

Politics and markets are colliding on the macro side as the US Financial Services Committee holds hearings over the Gamestop short squeeze a few weeks ago.  There’s talk of more stringent regulation on short selling. Naked shorts are already theoretically banned, if not entirely enforced.

The USDA released preliminary area estimates for row crops at the Outlook Forum last night, pegging corn at 92 million acres and beans at 90 million for a total pie of 182 million, a new record.  Their full projected balance sheets are due out tomorrow during the Forum’s 2nd day.  As always these are only USDA estimates, and initial survey-driven figures are not due out until March with the USDA Prospective Plantings report.

The USDA also pegged wheat acres (total) at 45 million, which was slightly below the average surveyed ideas but as “needed” to get the higher corn/bean pie.

Many are noting the stronger Chinese board movements yesterday. China had been closed for the holidays and, in a large part, trading back up on the moves we’ve seen globally during that window

US ethanol production was out at 911,000 bpd – down 26,000 week-on-week with higher stocks to 24.3 million.

Argentine weather maps seeing some more rains into the end of the month, with a widespread inch on the latest runs across most of the soy areas there, but still well below normal.

The trade’s also starting to get more confident on the Brazilian soybean harvest pace with reports of fieldwork pushing along there. This is also still well behind schedule and making a mess of export logistics but gradually making progress.

Regular export sales will be out later tonight (tomorrow US time) with the holiday delays, and there’s some speculation that we may see more flash sales hit with China back in business.

Matif has suspended trading for Jan 23 corn futures. The exchange is looking at adjusting the delivery months, hoping to get more liquidity and interest in what has traditional been a fairly limited volume contract.

One private Russian analyst group has cut their wheat crop estimate in recent days and spurred some discussion on the spec side. By contrast, many in the physical market have been gradually lifting internal estimates and gaining optimism about minimal winter kill, a few spots of ice crusting but not major.  Spring is rapidly approaching and we’ll see broader confidence in crop estimates/winter kill figures as temperatures start to rise.

Australia

Local markets took a breather yesterday with the board off, exporters getting filled from earlier in the week, and bids generally sliding across the country.  Some spot loads did pop up and get hit to cover nearby demand, but otherwise markets largely seeing wider bid/ask spreads as offers hold and bids slide.

ASX east coast wheat futures settled $6.50/t lower nearby to $292.50 March and the new crop January contract was down $4.30/t to $302.70.

Northern east coast domestic feed markets are remaining mostly steady, with liquidity fairly sparse, attracting demand in places

Extended run weather maps turning slightly wetter for the Darling Downs with the BOM pushing a 20+mm event across Northern NSW and S Qld into mid next week.

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