Markets

Daily Market Wire 2 December 2019

Lachstock Consulting, December 2, 2019

Oilseeds were lower and grains posted solid gains

  • Chicago wheat December contract up 15c/bu to 541.75c;
  • Kansas wheat December contract up 9.5c/bu to 447c;
  • Minneapolis wheat December contract up 6c/bu to 514.5c;
  • MATIF wheat December contract up €2.50/t to €185.75 per tonne;
  • Corn December contract up 8c/bu to 381.25;
  • Soybeans January contract down 5.25c/bu to 876.75c;
  • Winnipeg canola January contract down C$1.30 to C$456.60 per tonne;
  • MATIF rapeseed February contract down €2.50 to €389.75/t;
  • Brent crude January contract down US$1.44 to $62.43 per barrel;
  • Dow Jones index down 112.59 to 28051.41 points;
  • AUD weaker at $0.6762
  • CAD stronger at $1.3283
  • EUR stronger at $1.1018
  • US markets post solid month-end gains led by wheat
  • Corn harvest still not over the line
  • Rains throughout southern belt of Australia slowing harvest to a crawl

There has long been debate around shortening exchange hours rather than extending them – a condensed trading period forces the market to get on with it.

Friday was the pinup boy for the yes camp. Given the Thanksgiving Day holiday, Friday’s session was limited to 3.5 hours and the market got busy.

One of the main drivers in the wheat market is the lack of deliveries. This indicates that the cash market is a premium to the futures.

The gap needs to converge (to some extent) in the delivery period.

A few things are lining up for wheat – SRW in particular.

Despite a firm cash market the US is managing to export above the needed pace to reach the USDA target.

Add this to a patchy emergence and expected lower acres and things can get interesting quickly.

Corn has been in “sleeper” mode lately.

Even with 15pc still to harvest the market has struggled for direction but Friday saw the buyers take a stand.

On the export side the world corn market has been dominated by South American availability which has been a blanket over values and has limited US futures ability to rally.

We are entering a new set of fundamentals with a new political party in Argentina and reports of substantial ethanol growth in Brazil potentially limiting export availability.

Australia

Locally the weekend bought light showers across most of the harvesting areas from South Australia through to southern New South Wales. In any case, growers through SNSW and parts of northern SA are finished or on the very tail end.

Rainfall totals received were not huge. A maximum 10mm was received in some parts but just enough to slow harvest down for a day or two. Western Australia seems to be the only place getting a good run at it and expect another large increase in CBH receivals to kick off the week.

Markets continued to ratchet higher over the week, especially southern delivered markets for December.

There’s been at a $10-15/t inverse in the ASW1 December.

Wheat harvest has been slow and early tonnes were showing a higher protein percentage.

Markets in WA also finished the week firmer.

 

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