Markets

Daily Market Wire 20 April 2020

Lachstock Consulting, April 20, 2020

Wheat and corn firmer. Oilseeds mixed.

  • Chicago wheat May contract up US3.75¢/bu to 533.5¢;
  • Kansas wheat May contract up 8.75c to 478.75¢;
  • Minneapolis wheat May contract up 0.5c to 506.75¢;
  • MATIF wheat May contract up €2/t to €198.50;
  • Corn May contract up 2.5c/bu to 322.25¢;
  • Soybeans May contract down 4.25¢/bu to 832.5¢;
  • Winnipeg canola May contract down $C1.50 to $456.20/t;
  • MATIF rapeseed May contract up €1/t to €372;
  • Brent crude June contract up US$0.26 per barrel to $28.08
  • Dow Jones index up 705 points to 24243;
  • AUD firmer at $0.6360;
  • CAD firmer at $1.399;
  • EUR firmer at $1.086.

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Markets

Friday saw a value bid finally emerge on wheat, with Chicago ending up 3 3/4¢ to 533.5¢, KC +8 3/4¢ to 478 3/4¢, Minny +1/2¢ to 506 3/4¢, and Matif +2€ to 198.5€ on the earlier close.  Corn ended +2.5¢ to 322 1/4¢ and beans were off 4 1/4¢ to 832.5¢ (Matif up a euro to 372€, Winnipeg -$1.5 to $456.2).  Crude oil continues to fall in the US, with WTI trading down to $18.3/Brent nominally firmer to $28.1 as demand concerns on crude continue to weigh in.  The DOW was up 705 points as talk of yet another stimulus hits in the US (after the first package of aid ran out of money).  The AUD’s around 63.6¢, the CAD $1.399, and the EUR $1.086.  Coronavirus continues to spook the world, with the latest worries being South America – and on the ag side, ideas that with cases spiking there we could see more logistical problems.  That was the story a few weeks ago, with nothing much coming of it – can it hold true this time?

More ag stimulus is in the works for the US, with a new Bill passing late last week. It would  allocate US$16 billion for payments to farmers and ranchers, mostly ranchers this time, impacted by the collapse in markets from coronavirus.

Russian roulette

Markets are getting excited about Russian wheat exports again, with more talk from the government that the quota will run out in the next three weeks or so.  Over half a million tonnes of wheat is loading or set to load in the next two weeks, amid the rush to get grain out pre-ban.  It’s uncertain what will happen to those few with sales commitments in the post-ban window.  The GASC tender last week is a case in point. Some hope more demand will work back to the US (HRW) to cover more May demand.  With all that said, it’s a very short term and tricky balance on wheat. Ships loading new crop harvest in the Black Sea region are about 6 weeks away from new crop harvest loading and export bans should be fully lifted by then, so it’s purely a matter of the short term logistical inverse.  If we had this situation in Feb, or March, there would have been far more depth of demand to move but now the overall volume is likely to be muted.  Demand for early new crop loadings/shipments has already spiked in the Black Sea as shippers pushed demand toward the front end of new crop.

Two more soybean boats, eventually expected to be destination China, were flashed to unknown on Friday. There’s no China news on wheat yet,  despite talk of more HRW trading.

Field work positive

New season continues to rapidly approach, with field work going around the world.  Updated US progress figures should be out tonight, although with the recent weather there’s less progress than normal expected to be reported.  Ukrainian corn is about a third planted, and down in South America the Argentine bean harvest is pushing towards 40pc.  Field work in India’s wheat harvest is also reportedly pushing into gear after coronavirus induced delays causing localised yield loss, according to reports. While it does not appear at present to amount to much damage, it should at least take the edge off what was looking to be a much larger crop.

Australia

Aussie markets are heading into real planting, with ANZAC day coming up.  Early planted pulses and forage crops have been emerging in good condition in eastern Australia, and the dry weather should continue to allow for good field work.  Some welcome rain is forecast to reach southern SA and Victoria later this week, but otherwise it’s a dry two-week outlook.  Even though recent months of moisture have delivered great conditions for field work at present, we could benefit from a bit more on the longer term weather maps.

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