Markets

Daily Market Wire 2 June 2021

Lachstock Consulting, June 2, 2021

All markets firmed on Tuesday, strength in grains outpacing strength in oilseeds.

  • Chicago wheat July contract up US30c/bu to 693.5c;
  • Kansas wheat July contract up 24.25c/bu to 637.5c;
  • Minneapolis wheat July contract up 44c/bu to 771.5c;
  • MATIF wheat September contract up €5/t to €218.75/t;
  • Corn July contract up 32c/bu to 688.75c;
  • Soybeans July contract up 18c/bu to 1548.5c;
  • Winnipeg canola July contract up C$6.70/t to $896.70;
  • MATIF rapeseed August contract up €16.75/t to €532/t;
  • US dollar index up 0.1 to 89.9;
  • AUD firmer at US$0.775;
  • CAD weaker at $1.207;
  • EUR weaker at $1.221;
  • ASX wheat July contract down A$1/t to $303/t;
  • ASX wheat January 2022 up $0.50/t to $310.50/t.

International

This is a weather market.
It was 100 degrees Fahrenheit in North Dakota (38°C) and that was the foreword to last night’s novel. With little-to-no rain forecast in the medium-term, ideas are gaining momentum that the spring wheat crop is going from bad to worse.
Minneapolis spring wheat last night stole the show rallying US44c/bu, 6 pc.
Meanwhile, at the other end of the country, the HRW belt through TX,OK and KS have plenty of rain and are about to see a deluge which is not ideal for a crop that is 17pc harvested (Texas) and is fully mature.
Chicago and Kansas wheat futures both were about 4pc firmer.
Corn firmed almost 5pc despite good rainfall throughout the belt. USDA had its first crack at corn conditions which it rated 76pc good-to-excellent versus trade guesses of 70pc. Interesting to see what the market makes of this and a dryer forecast.
Beans were passively higher by US17.75c/bu, meal put on $2.80/st and oil rallied 1.54c/lb, about 2pc. In outside markets the Dow snuck on another 45 points and the Aussie was trading at 0.7750.
In a seemingly endless parade of Russian crop estimates, crop consultancy IKAR called the Russian crop up 500,000t to 79.5 million tonnes (Mt).
Brazil agribusiness consultancy AgRural sliced another 5Mt off their corn crop, pegging it at 73Mt vs USDA at 102Mt
As soaring summer demand begins to outstrip still-muted supply from major oil suppliers such as the US and OPEC, US benchmark oil prices close 2.1 percent higher at $67.72 a barrel, the highest closing price since Oct. 22, 2018. An oil-producers group that includes OPEC and Russia agreed today, as expected, to maintain a slow pace of production increases that may be insufficient to meet rapidly rebounding global demand, especially given that US oil production has remained unchanged for the past year, hovering around 11 million barrels per day. The weekly API data on US oil stocks will be released tomorrow, followed by official EIA data on Thursday
Live cattle futures on the Chicago Mercantile Exchange are down 2.3 percent, owing in part to a cyber-attack on major meat supplier JBS, which has impacted the company’s operations around the world. The dip in futures prices reflects apprehension over the magnitude of the intrusion, as it is unclear how much damage the attack has done to JBS’ operations.

Australia

Current crop markets again remained relatively unchanged yesterday. We saw some more action on wheat and barley, both continuing to trade on the east coast. New crop bids/offers again remained wide and canola markets were unchanged in eastern and Western Australia yesterday.
Showers of rain were pushing through SA this morning with a front crossing the SA Mallee. There were reports of growers and agronomists trying to define yield potential in the Victorian Mallee region. That situation will clarify over the next two weeks and will depend on rain.
Even though freight rates are not easing, logistics feel to be freeing up. Growers are finishing seeding programs and grower fleets are becoming more available for June/July.

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