Markets

Daily Market Wire 19 March 2020

Lachstock Consulting, March 19, 2020

The US dollar was much firmer, as were most agricultural markets, but corn fell 2 per cent.

  • Chicago wheat May contract up US9¢/bu to 508.25¢;
  • Kansas wheat May contract up 14.25c to 446.5¢;
  • Minneapolis wheat May contract unchanged at 509.25¢;
  • MATIF wheat May contract up €4.75/t to €184/t;
  • Corn May contract down 8.75c/bu to 335.25¢;
  • Soybeans May contract up 1.25¢/bu to 825.5¢;
  • Winnipeg canola May contract up C$4.10/t to $457.40/t;
  • MATIF rapeseed May contract unchanged at €344.25/t;
  • Brent crude May contract down US$3.85 per barrel to $24.88;
  • Dow Jones index down 1338 points to 19899;
  • AUD weaker at $0.5598;
  • CAD weaker at $1.4627;
  • EUR weaker at $1.0907.

Market news

Wheat continued to lead the way up through the session in the US, with Chicago closing +9¢ to 508.25¢, KC +14.25¢ to 446.5¢, Minny unch, and Matif +4.75€ to 184€ on the earlier close.  All the US markets have continued to push up into the early overnight session, another four cents or so on KC and Chicago as of writing.  Ongoing firmness in cash basis and reports about export business happening on the HRW front (though we haven’t seen a flash yet – if the reports are accurate we should tomorrow) have finally got the wheat markets excited.  Corn mean while continued to collapse with the ethanol problems, ending down 8.75¢ to 335.25¢ (but up 4¢ overnight so far) and beans were up a penny and a quarter to 825.5¢ (Matif unch at 344.25€, Winnipeg +$4.1 to $457.4).  Crude oil set new lows, collapsing to just over $20 WTI/$24.9 Brent but is up into the overnights at $22.7/$26.3.  The DOW finally closed sub 20k, dropping 1338 points to 19898, and the AUD is at 57.2¢, CAD $1.454, the EUR $1.091. The Russian rouble has pushed over 80 once again.

Turmoil on the global markets continues with the latest coronavirus problems including a partial shutdown of the US/Canadian border.  Vaccine testing is underway, but there’s still limited confidence in any sort of “quick fix” to the ills of the world.  Economic prognostics continue to trend down as analysts attempt to extrapolate the infection curves and potential for further trade restrictions.

Corn biofuel woe

US ethanol production figures this week were only down about 9,000 barrels per day in the latest published figures, but there’s talk that next week’s figures may come in far worse given the collapse in margins.

Lots of variation across the corn belt, but we hear that “average” ethanol margins at current prices are approaching a quarter into the red – and speculation that with the cheap crude we may also see a collapse in blending (despite cheaper ethanol).

Cash basis bids continue to be cut across the midwest, and there’s been some beginning concerns about counterparty risk on unpriced sales contracts.

Australia

Aussie markets have continued to push higher across the board with both wheat and barley seeing support from the weaker dollar. Many east coast markets were up $3-4/t yesterday. Volume has picked up as sales triggers are hit.

New crop markets have also firmed, helped by the weaker dollar and the recent spike in the board. The ASX January 2021 wheat contract was up about $8/t to $333/t settle.

Weather maps are also looking a bit better into later next week, with chances of more moisture across the east coast, though SA remains dry.

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