Markets

Daily Market Wire 2 March 2020

Lachstock Consulting, March 2, 2020

Futures were mixed; EU rapeseed fell 2pc.

  • Chicago wheat May contract down 2.5¢/bu to 525¢;
  • Kansas wheat May contract up 1.5¢/bu to 453.25¢;
  • Minneapolis wheat May contract up 3.5¢ to 527.5¢;
  • MATIF wheat May contract down €2.75/t to €184.25/t;
  • Corn May contract up 0.25¢/bu to 368.25¢;
  • Soybeans May contract down 2.75¢/bu to 892.75¢;
  • Winnipeg canola May contract down C$0.30/t C$456.30/t;
  • MATIF rapeseed May contract down €7/t to €380.25/t;
  • Brent crude May contract down US$2.60 per barrel to $49.60;
  • Dow Jones index down 357 points to 25411;
  • AUD weaker at $0.65;
  • CAD weaker at $1.339;
  • EUR firmer at $1.103.

Market news

Calmer agricultural markets ended the week, even with continued concerns on equities. Chicago ended down 2 1/2¢ to 525¢, KC +1.5¢ to 453 1/4¢, Minny +3.5¢ to 527.5¢, and Matif down 2 3/4€ to 184.25€ on the earlier close.  Corn was up a quarter cent to 368 1/4¢ and beans gave up two and a quarter to 892 3/4¢ (Winnipeg dropped 30¢ to $456.3.  Matif slammed off hard though, giving up 7€ to 380.25€ (-4.5€ Nov) after Chinese markets traded down hard again.  Crude oil’s fall has continued with ongoing demand worries, falling another two bucks to $44.7 WTI / $49.6 Brent and the DOW dropped 357 points.  The AUD’s about 65¢ even, the CAD $1.339, and the EUR $1.103.

Coronavirus has been dominating headlines across the world and we’ve now seen the first deaths in the US and Australia.  Comments that Coronavirus may have been spreading for nearly two months prior to detection in Washington state aren’t going to do anything to ease worries about a pandemic – and more screenings are going into place around the world (though more of China’s economy is back online).

On the economic front, the US President has called for lower interest rates, which he has repeatedly advocated previously, to protect the economy from any virus driven slowdown.  US politics in general is starting to heat up with the election approaching. Joe Biden’s win in South Carolina over the weekend has put even more pressure on “Super” Tuesday’s results to determine how much of a mess the Democratic convention/nomination may become.

Trump’s re-election odds have shifted lower with the stock market collapse, but at the same time there’s no clear consensus yet that any of the Democratic candidates have a strong enough base to defeat him. There’s a lot of campaigning to come.

The weekly Commitment of Traders report from the CFTC had wheat funds sharply shorter (22,700 contracts cut to the long) and a much bigger corn short (to -95,500 net), one of the bigger moves in a while on wheat but no real surprise given the price action across the windows.  Still more potential short can be seen in both crops, though not inclusive of the end of week moves.

US crop insurance prices are now “set”, though not officially published, for row crops. Values were lower across the board, corn down12¢ y-o-y and beans down 37¢.

Acreage estimates are continuing to come out as markets adjust their ideas, with Farm Futures publishing a 96.6 million acres corn estimate and 80.6 million acres beans. This would be the biggest corn plant in many years.  These are survey estimates, so generally well taken as reflective of sentiment and but decisions will still change prior to fieldwork.

Australia

Aussie markets have been hypnotized by the rain forecasts for the east coast. Runs late last week were showing 50+mm across much of central NSW.  Weather models do seem to be pushing the moisture slightly further north and away from western VIC, but all in all a great event for central and southern NSW.

 

 

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