Markets

Daily Market Wire 2 April 2019

Lachstock Consulting, April 2, 2019

Futures markets all firmer overnight; Monday’s settlements as follows;

  • CBOT wheat May contract up 5c to 462.75c per bushel
  • Kansas wheat May contract up 4.5c to 434.5c
  • Corn May contract up 5.25c to 361.75
  • Soybeans May contract up 11.25c to 895.5c
  • Winnipeg canola May contract up C$1.30 to $456.60 per tonne
  • MATIF rapeseed May contract up €2 to 359.50/t
  • Dow Jones up 329.74 points to 26,258.42
  • Crude oil May contract up US$1.45 to 61.59
  • AUD unchanged 0.7110c
  • CAD up to 1.332
  • EUR down to 1.121.

Commentary on markets

Grains and oils bounced slightly to start the week, with Chicago wheat +5¢ to 462 3/4, KC +4.5¢ to 434.5, Minny -1 3/4¢ to 553¢, and Matif +1€ to 187 (on the earlier close). Corn picked up 5 1/4¢ to 361 3/4 after some better than expected export inspections, and beans bounced 11 1/4¢ to 895.5¢. Winnipeg picked up a buck thirty to $456.6 and Matif rapeseed was up 2€ to 359.5. Crude has jumped up $1.45 to $61.6/barrel ($69 Brent) as ideas of lower global production circulate around the market, and the DOW is up 330 points following positive Chinese economic figures (though some have questioned their accuracy amid the ongoing trade war politics). The AUD is up to 71.1¢, the CAD is trading at $1332, and the EUR at $1.121. Brexit politics remain a mess, with more votes overnight about how they will proceed – but no word yet as to whether they’ve finally reach a consensus. More trade talks will be starting this Wednesday evening in Washington between China and the US, and rumours are circulating that if constructive they will be followed with more ag purchases.

Export trade looking up

US export inspections were largely as expected for wheat, with some 418 kmt loaded (vs ideas 300-500) and also for beans at 731 kmt (thoughts up to 900) and included four boats to China. Corn was slightly above prior estimates at 1.26 MMT. There was an Egyptian wheat boat in the mix, but it was spring wheat – private business, not GASC. Meanwhile, we’ve also seen the USDA flash another 828 kmt of Chinese bean sales – the other half of the reported ~1.5 MMT sold last week (816 kmt flashed on Friday). The USDA’s local China attache has come out with an oilseeds annual report, forecasting 19/20 bean imports to rebound 3.5 MMT YOY (up to 91.5 MMT, from 88 MMT this year, and vs 94.1 MMT last year) and attributing the slow demand to the ongoing swine flu problems.

Wheat wrap

The first full US crop progress report for the season was released a few minutes ago, calling the total winter wheat crop at 56% good/excellent – up from 32% at this point last year and supported by the last month of moisture (floods have not impacted most of the big winter wheat areas). Russian analyst group SovEcon has reportedly cut their export forecast for old season (18/19) wheat to 35.1 MMT, noting the ongoing firmness in local prices – though we also note that FOB markets have steadied in the last week. Meanwhile, weekly EU customs figures put wheat exports at ~480 kmt (non durum) as exports gradually pick up pace there after the slow start to the season.

Weather EU, Russia and Ukraine dry

Drying conditions in parts of the southern EU, Ukraine, and southern Russia are grabbing some interest as the more southerly wheat fields there are approach flowering. We’ve noted this dryness previously, but then saw some showers come through – and note that there are some rains forecast for Ukraine and the EU into late next week (though not much currently towards the Volga in Russia.

Source: Lachstock Consulting

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