Markets

Daily Market Wire 19 May 2021

Lachstock Consulting, May 19, 2021

Wheat made small moves mostly lower overnight. Corn gained about 1pc and soybeans fell by a similar margin.

  • Chicago wheat July contract down US1.75c/bu to 698c;
  • Kansas wheat July contract down 4.5c/bu to 647.75c;
  • Minneapolis wheat July contract down 1c/bu to 714c;
  • MATIF wheat September contract up €0.50/t to €215/t;
  • Corn July contract up 5.75c/bu to 658.25c;
  • Soybeans July contract down 13.25c/bu to 1574.25c;
  • Winnipeg canola July contract up C$26.30/t to $943.10;
  • MATIF rapeseed August contract up €1.50/t to €542.50/t;
  • US dollar index down 0.4 to 89.8;
  • AUD firmer at US$0.780;
  • CAD firmer at $1.206;
  • EUR firmer at $1.222;
  • ASX wheat July contract up AU$4.50/t to $312.50/t;
  • ASX wheat January 2022 unchanged at $314/t.

International

Chicago wheat traded a wide range before settling in the red – down 2usc/bu to close at 697.75usc/bu. Kansas walked a similar path also finishing lower by 3.5usc/bu to close at 647.75. Minni rounded off the US wheat complex with a 1usc/bu lower print. Europe and the Black Sea all finished slightly higher with Black Sea futures closed up US$3/mt. Corn rallied 6.75usc/bu to close at 658.25usc/bu. Soybeans closed down 13usc/bu to settle at 1574.25usc/bu, meal was down USD$3.5/st while oil was 0.34usc/lb lower on the day.

Big ranges with moderate closes probably don’t reveal the full story. Brazil corn weather has deteriorated and while there is still rainfall on the horizon there is debate about the benefit, if any. Conversely, the US farmer has been busy getting corn and wheat in the ground and the logical question is now, how many acres? The conditions have been conducive to field work, price has told the farmer to plant and the export outlook support is solid. Global balance sheets need a supply response to compensate for the Brazilian shortfall.

Rainfall throughout the corn belt in the US looks excellent, especially in the bigger producing states such as Iowa and Illinois.

The break in futures has uncovered global demand. Bangladesh, Algeria and Japan all seeking wheat offers.

Signs that palm oil production is taking a hit was reflected in a 5pc rally in futures. Malaysia the main shortfall.

Food inflation is a destabilising and destructive impact of the wider stimulus packages. Argentina has limited exports of beef for 30 days in an effort to contain inflation which is pegged somewhere around 50pc annually.

China bought another 1.36Mt of US corn which puts them around 8Mt of new crop purchases.

Australia

Cash markets remained slow and quiet yesterday with smalls trading across the day to fill in prompt loads here and there along the east coast. Bids and offers on the current crop were widely apart through the delivered market zones for wheat and barley. New crop bids on the boards were a touch softer, wheat and barley down by $2-3/t and canola was back up $5/t for Dec/Jan delivery.

AUD/USD pushed through .78 in the early hours of the morning hitting weekly highs. Slow trading and downbeat US dollar allowing the Aussie to push higher and the Westpac Consumer Confidence and Leading Index from Australia will be looked upon for fresh incentive.

We still see and hear of the horror stories of the mice plague that continues to cause havoc through NSW. Growers in Victoria are on alert and starting to begin their baiting program.

More confidence has been built into the weather models with increased precipitation for WA, SA and Victoria’s Wimmera/Mallee regions where growers are desperately hanging out for that next 10-15mm event. With dryer condition through northern NSW and southern Queensland we should see these conditions as a positive for sorghum harvest and also for getting on paddocks for winter crop planting.

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