Markets

Daily Market Wire 19 January 2022

Lachstock Consulting, January 19, 2022

US wheat futures returned from the long weekend 3pc to 4pc firmer. Canola continued volatile, closing lower.

  • Chicago wheat March contract up US27.5cents per bushel to 769c/bu;
  • Kansas wheat March contract up 27.75c/bu to 772.75c/bu;
  • Minneapolis wheat March up 28.75c/bu to 907c/bu;
  • MATIF wheat March contract up €2/t to €267.75;
  • Corn March contract up 3.25c/bu to 599.5c/bu;
  • Soybeans March contract down 8.5c/bu to 1361.25c/bu;
  • Winnipeg canola March 2022 contract down C$11.20/t to $964/t;
  • MATIF rapeseed February 2022 contract down €26.25/t to €737.25/t;
  • ASX March 2022 wheat contract up A$4/t to $350/t;
  • ASX Jan 2023 wheat contract down $1/t to $355/t;
  • AUD dollar weaker at US$0.718.

International

Black Sea wheat was quoted as US$3.75/t higher, soybean meal was down almost 4pc, soybean oil firmed 1pc and the Dow Jones Industrial Average dropped a further 1.5 per cent.

January is a funny month with a lack of fundamentals to get your teeth into, but selling down wheat with all the US growing risk in front of us seems a little preemptive. The US is overvalued compared to competing origins and global physical markets have been softer, but the US crop went into dormancy in pretty bad shape so some risk premium is warranted.

Weather in Brazil is showing some improvements in southern and northern areas, but recent rains were irregular in Parana and Rio Grande do Sul and the heavier amounts favoured the Atlantic coast, while the soybeans are grown mostly in the western regions of those states. As a result, crop consultant Michael Cordonnier cut his Brazilian soybean crop estimate another 1 million tonnes (Mt) to 134Mt. Dr Cordonnier left his Brazilian corn crop estimate at 112Mt, but lowered his Paraguay soybean crop estimate by 1Mt to 7Mt. He left his Argentine soybean and corn production forecasts at 43Mt and 51Mt respectively.

Australia

Local markets remained largely unchanged yesterday. Wheat was largely offer side through the wider market along the east coast, and trade markets were mixed across the strip, with wide spreads between bid and offer.

Barley was A$1/t stronger in the Adelaide zone as nearby shipments on the stem build for barley in the back half of January for Adelaide terminals.

Canola remains a dead duck, with very little action after recent pull-backs in the bids now buyers have covered nearby domestic and export demand, and bid and offers remain very wide in the market. February is now expected to see around 400,000t of canola shipped.

More rain has fallen in northern New South Wales, and Moree recorded 56 millimetres in the 24 hours to 9am today. La Niña is extended, and we continue to see moisture build on the BOM’s eight-day forecast for the east coast.

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