Markets

Daily Market Wire 19 November 2019

Lachstock Consulting, November 19, 2019

EU and Canadian canola firmer, US futures mixed.

  • Chicago wheat December contract up 4.5 cents per bushel to 507.25c;
  • Kansas wheat December contract up 1.5c to 418.5c;
  • Minneapolis wheat December contract down 0.5c to 503.25c;
  • MATIF wheat December contract up €0.75 to €178 per tonne;
  • Corn December contract down 3.5c to 367.75c;
  • Soybeans January contract down 8c to 910.25c;
  • Winnipeg canola January contract up C$1 to C$463.50 per tonne;
  • MATIF rapeseed February contract up €0.75 at €390/t;
  • Brent crude January contract down US$0.86 to $62.44 per barrel;
  • Dow Jones index up 31.33 to 28036.22 points;
  • AUD weaker at  $0.6794;
  • CAD stronger at $1.3211;
  • EUR stronger at $1.1071.

In market news overnight:

  • Wheat mixed but tags several key tech levels
  • Saudi buy 1 million tonnes barley
  • US wheat conditions fall
  • Corn harvest still dragging on

Small gains overnight in the wheat pits with a mixed bag of technical take-aways.

Depending on your bias, bullish or bearish, there was something for everyone in last night’s trading range.

Post the close the USDA pegged crop conditions a little lower – a recent trend but one that is largely ignored given the extremely low correlation between pre-dormancy crop condition and final yield.

Other key measures such as emergence are catching up to the longer-term averages with winter wheat pegged at 83pc vs the 5-yr average of 86pc.

Corn is still trying to catch up. Its harvest pace was pegged at 76pc vs the 5-yr average of 93pc while beans were 91pc in the bin vs 95pc 5-yr average.

Wheat demand is ticking along. Tunisia, Algeria and anticipated Saudi are all putting their hand up. Russian cash was slightly lower and French markets were firm.

USDA slip-up impacts trade

Data is king and the US is spoilt for it.

The USDA stats on crop condition/progress and export flow is unrivalled, but with good information flow comes complacency.

This was highlighted in the debacle around the last WASDE release.  Then last night the USDA cancelled some forward bean sales to China, only to later admit that was actually last year and they accidentally re-reported them.

We can’t underestimate the amount of money in black box trading systems that are directly linked to these data points. Errors and delayed releases will have an impact on how this capital will flow.

Australia

Local markets kicked off the week a touch lower with bids and offers pulling back on southern delivered markets to finish the day fairly wide.

More buyers are starting to hit the cash boards, with a mix of the trade and consumers picking up some tonnes, as the grower hits the cash at site numbers.

Harvest through the Wimmera region has kicked off with some canola and barley hitting the bins. All eyes will be on quality and yields as they have had a very good season.

Saudi reportedly purchased 1.02mmt of feed barley for delivery Feb/March 2020. Given current Aussie values this puts WA/SA origin in the mix for a couple cargoes.

 

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