Markets

Daily Market Wire 19 July 2019

Lachstock Consulting, July 19, 2019

Most grains and oilseeds futures settled lower overnight.  The US dollar fell.

  • Chicago wheat September contract down 12 cents per bushel to 493.5c
  • Kansas wheat September contract down 9c to 432.75c,
  • Minneapolis wheat September contract down 2.25c to 525.5c,
  • MATIF wheat September contract down €1 per tonne to €174.75;
  • Corn September contract down 11.5c to 424.5c;
  • Soybeans August contract down 1.25c to 881.25c;
  • Winnipeg canola November contract up C$1.30/t to $445.40;
  • MATIF rapeseed August contract down €2.50 to €372;
  • Brent crude September contract down $1.74 per barrel to $61.93;
  • Dow Jones up 3.12 points to 27,222.97;
  • AUD strengthened US$0.7070c;
  • CAD strengthened to $1.302;
  • EUR strengthened to $1.126;

Market summary

Grains were under the hammer today, with corn breaking down hard and taking the wheat complex with it – corn traded off 11.5¢ to 424.5¢ with some more improvements to the longer term weather maps.  Chicago wheat closed down 12¢ to 493.5¢, KC -9¢ to 432 3/4¢, Minny -2 1/4¢ to 525.5¢, and matif -1€ to 174 3/4€ on the earlier close.  Beans dropped a penny and a quarter to 881.25¢, while Matif rapeseed sold off 2.5€ to 372€ and Winnipeg canola was up $1.3 to $445.4.  The crude oil blood bath also continued, with WTI off $1.5 to %55.3/barrel, Brent -$1.7to $61.9 (both are up about 70¢ since close), and the DOW picked up 3 points.  The AUD is trading at 70.7¢, the CAD at $1.302 (nominally stronger from yesterday), and the EUR is at $1.126 (slightly stronger).

Wheat export sales figures were mostly as expected, at 347,000t vs ideas up to 400,0000t, corn slightly below expectations at 333,000t (both seasons) vs hopes of up to 800,000t, and beans as expected at 326,000t (against a wide range of ideas between 100,000t and 700,000t).  There was no new Chinese bean business reported and no indications that they will follow through on previous promises to buy more as part of trade talks.  While there was a Chinese milo boat on the sales this appears to have been switched from an existing unknown sale.

Other global news has been relatively quiet, with the ongoing concerns about US row crop weather moderated on the improved weather forecasts though longer periods of cooler weather may end up exacerbating the problems from early planting if they push crop maturity further back and the corn belt does not see an “Indian Summer”.  Hot weather is back in Europe and as mentioned the other day continues to raise concerns about row crops as water restrictions are applied in France (cutting irrigation).  India’s monsoon is still some ~16% below average (in terms of moisture) with spotty rains after the late start – which may prove supportive to pulse crops with weather risks to kharif crops there.  Russian harvest results also continue to underperform as harvest approaches one third complete with average reported yields still ~3% lower vs this time last year even with the weather problems then.  The overall crop is still dependent upon the spring wheat areas, but the continued lower yields are adding some hope for the bulls albeit with good quality wheat coming off.
We note that news headlines are reporting cancellations of Chinese barley purchases from Ukraine with reported switches to French grain – we’re also seeing more Australian barley moving finally, despite the ongoing political risks.  There’s no clarity in either case at current, so the situation remains in flux with more shifts probable in the coming weeks.

Lachstock wishes the best of luck to Cameron Russell as he finishes up his last day here with us today.

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Source: Lachstock Consulting

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