Markets

Daily Market Wire 19 May 2020

Lachstock Consulting, May 19, 2020

Markets were mixed. US dollar weaker.

  • Chicago wheat July contract down US3.25¢/bu to 497¢;
  • Kansas wheat July contract down 6c to 446.25¢;
  • Minneapolis wheat July contract down 1.5c to 504.75¢;
  • MATIF wheat September contract up €1.50 to €186.50/t;
  • Corn July contract up 1.5c/bu to 320.75¢;
  • Soybeans July contract up 6.5¢/bu to 845¢;
  • Winnipeg canola July contract unchanged $472.30/t;
  • MATIF rapeseed August contract up €4/t to €374/t;
  • Brent crude July contract up US$2.31 per barrel to $34.81
  • Dow Jones index up 911 points to 24597;
  • AUD firmer at $0.6553;
  • CAD firmer at $1.3919;
  • EUR firmer at $1.0971.

Markets

In the wheat pits Chicago settled down -3.25 usc/bu closing at 497usc/bu, Kansas was -6 usc/bu lower to settle at 446.25usc/bu, while Minni softened -1.5 usc/bu to go out at 504.75usc/bu. Corn gained 1.5 usc/bu to go out at 320.75usc/bu while Beans were up 6.5 usc/bu to settle at 845usc/bu WCE Canola softened 0 CAD/mt closing at 472.3CAD/mt with Matif Canola finishing higher by 4 Eur/mt. In outside markets the Dow Jones gained 911.95 points, Crude was up 0.83 bbl the Aussie was 0.0111 points higher to settle at 0.6525, the CAD softened -0.0168 while the EUR gained 0.0096.

A mixed night for agricultural markets despite the energy markets finding plenty to get excited about. US equities and crude got bid as Moderna Inc announced that a vaccine they are working on yielded signs that it can create an immune-system response in the body. Crude was up 11%, driven by a combination of increased demand ideas and the fact that the US rig count fell to its lowest level last week since records began back in 1975. Even the US ethanol industry is starting to dust off plants that have been mothballed for the last few months.

Post the close the USDA released their condition and progress report which pegged wheat good to excellent ratings back another 1% to 52% – this was a slight disappointment to the bulls who were looking for some more frost damage in the HRW states. The US farmer kept the hammer down on row crop plantings with corn now 81% done. Corn is an interesting market with another higher print posted. Debate will continue over acreage for the next month so this is more about positioning than fact.

Barley tariff slap

The big news in the south is the confirmation that China will slap an anti-dumping tariff of 73.6% and a countervailing subsidy of 6.9% on Australian barley effective from the 19th of May, for a period of 5 years. While China indicated this was likely to happen it will be interesting to see how the local market will react. Post the initial announcement over a week ago, flat price was off as much as $50/mt in some parts of the country which, compared to competing origins into Saudi put Australia as the most likely to trade. However, this is largely academic without an open tender. The other question remains – if China can’t access Australian malt barley, where do they source it from.

Australia

Back locally, markets kicked off the week firmer on old and new crop, with wheat up $2-3 and barley trying to find some stable ground. We also saw canola up $2-3/mt across the board. There was some old crop liquidity trading yesterday through Victoria with feed barley and milling wheat all being transacted. Stronger AUD/USD this morning may see the bids pull back a buck or 2 for the day and the forecast for the next 8 days looking more and more confident with wide spread rain that is set to hit parts of South Australia tonight. This is very timely and will be welcomed by growers, topping up the profiles again as planting comes to the tail end.

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