Markets

Daily Market Wire 2 July 2019

Lachstock Consulting, July 2, 2019

The carnage continued into Monday on the US boards, with

  • Chicago wheat September contract down 15.4 cents per bushel to 511.6c;
  • Kansas wheat September contract down 17.4c to 444c,
  • Minneapolis wheat July contract down 11c to 543.2c,
  • MATIF wheat September contract down €2 per tonne to €178.25;
  • Corn September contract down 9.2c to 415.4c,
  • Soybeans August contract down 14.6c to 889.6c
  • MATIF rapeseed down €0.50 to €363.75;
  • Winnipeg canola market closed for Canada Day holiday;
  • West Texas crude down US$0.15 per barrel to $58.90, Brent up $0.50c to $65/barrel;
  • Dow Jones up 117 points;
  • AUD lower at $0.697;
  • EUR lower at $1.128;
  • CAD higher at $1.313.

Corn and soybeans

There is nothing fundamentally new on the row crop front to hit the press since last Friday’s USDA report, but the market has continued to trade the numbers, despite ongoing questions about their accuracy and ahead of the upcoming resurvey.  Crop conditions saw corn at 56 per cent good to excellent, unchanged versus last week in total, with some shifts between categories, and beans also unchanged at 54pc good to excellent.  Crop development has been catching up in the recent warmer and drier weather, which has added some yield optimism for those who are bearish on prices, and after much more pessimistic ideas earlier given the late plantings.

Protests in Hong Kong have grabbed international headlines overnight, with many questions about how the Chinese government will respond today after clashes with police last night.

Wheat

Saudi Arabia’s wheat tender results were released yesterday, with sales in the low US$230s per tonne to Red Sea ports, and around $240/t to Persian Gulf ports. The results allow for optional origin, but only works on shipment from German and Baltic Sea ports at those prices.  At the same time, Egypt’s General Authority for Supply Commodities (GASC) has returned to the market with a mid-August tender. With good quality and yields reportedly coming from wheat crops being harvested in southern Russia, GASC is likely to see some competitive offers relative to the previous tender.  Russia has formally announced it will leave its wheat export tax at zero for this season. This is no surprise to the market, but is a further confirmation that the government is not concerned about any smallness in its wheat crop this year.

Australia

We’re still watching this weather forecast, which includes a system set to move into Western Australia on Thursday. It is expected to hold further south as it moves east, and offers no improvement to the limited rainfall forecast for New South Wales and northern Victoria in the near term.

Source: Lachstock Consulting

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