Markets

Daily Market Wire 20 August 2020

Lachstock Consulting, August 20, 2020

Wheat strengthened. US dollar firmed.

  • Chicago wheat December contract up US4.5c/bu to 522c;
  • Kansas wheat December contract up 7.5c/bu to 449c;
  • Minneapolis wheat December contract up 2.75c/bu to 523.75c;
  • MATIF wheat December contract up €1 to €181.75;
  • Corn December contract down 2c/bu to 339.75c;
  • Soybeans November contract up 0.25c to 914;
  • Winnipeg canola November down C$0.10 to C$487.80;
  • MATIF rapeseed November contract down  €0.25/t to €379.75;
  • Brent crude October contract down US$0.09 per barrel to $45.37;
  • Dow Jones index down 85 points to 27,694;
  • AUD weaker at $0.718;
  • CAD weaker at $1.321;
  • EUR weaker at $1.184.

Wheat bounce

Back up again with a bounce on the wheat side – Chicago closed +4.5¢ to 522¢, KC +7.5¢ to 449¢, Minny +2 3/4¢ to 523 3/4¢, and Matif up a euro on the earlier close.  Corn dropped two cents to 339 3/4¢ while beans ended unchanged (up a quarter cent) and Winnipeg dropped ten cents (Matif was off 2 euros).  Crude finally saw a steady trading day, with WTI around $42.9/Brent $45.2 and the DOW dropped 85 points.  The USD managed to firm back to 93 with the AUD weaker to 71.8¢, the CAD $1.321, and the EUR $1.184.

Markets have been keeping an eye on the ProFarmer crop tour commentary. Scouts moved through parts of Iowa overnight and noted the damage to corn, both in terms of drought stress and derecho weather impacts, but it’s been far from a “zero” production result.  Although there’s been more focus on corn, the bean comments have come in very positive.  They noted the need for some moisture but observed that bean crops had great potential.  The Agriculture Ministry in Ukraine estimated its corn crop at 35 million tonnes (Mt) implying some 3-4Mt of losses from the drought there.

We finally saw Algerian tender results work their way into the market last night, with values reportedly in the low US$230s per tonne cost, insurance and freight.  At those levels it looks unlikely that there will be much French wheat shipped, outside of traders Casillo and Lecurer most likely, and it does price out about right for German/Baltic origination. French origin wheat this year is doing the job of shifting demand away following its poor local crop. There’s been more speculation about the Russian spring wheat crop starting to harvest. Estimates have pushed up sharply in recent weeks again towards, and above 80Mt, but naysayers are watching for any disappointment on spring wheat yields.

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Australia

Markets were a fraction softer on the new season amidst the ongoing rain showers.  Old crop also eased off with demand in hiding and hoping to roll as much demand forward to new crop as possible.  More moisture’s still on the maps for parts of Vic and southern NSW this weekend, but it’s more patchy and light and the extended outlooks don’t have much precipitation through the week after.

 

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