Markets

Daily Market Wire 20 May 2020

Lachstock Consulting, May 20, 2020

Markets continued mixed.

  • Chicago wheat July contract up US1.75¢/bu to 498.75¢;
  • Kansas wheat July contract down 4.75c to 441.5¢;
  • Minneapolis wheat July contract up 3.5c to 508.25¢;
  • MATIF wheat September contract up €0.50 to €185/t;
  • Corn July contract up 0.5c/bu to 321.5¢;
  • Soybeans July contract down 2.5¢/bu to 842.5¢;
  • Winnipeg canola July contract down $C0.30 to $472/t;
  • MATIF rapeseed August contract down €0.25/t to €373.75/t;
  • Brent crude July contract down US$0.16 per barrel to $34.65
  • Dow Jones index down 391 points to 24206;
  • AUD weaker at $0.6546;
  • CAD weaker at $1.3932;
  • EUR firmer at $1.0942.

Markets

In the wheat pits Chicago settled up 1.75 usc/bu closing at 498.75usc/bu, Kansas was -4.75 usc/bu lower to settle at 441.5usc/bu, while Minni rallied 3.5 usc/bu to go out at 508.25usc/bu. Corn gained 0.5 usc/bu to go out at 321.25usc/bu while Beans were down -2.5 usc/bu to settle at 842.5usc/bu WCE Canola softened -0.3 CAD/mt closing at 472CAD/mt with Matif Canola finishing lower by -0.25 Eur/mt. In outside markets the Dow Jones fell -390.51 points, Crude was down -0.31 bbl the Aussie was 0.0006 points higher to settle at 0.654, the CAD softened -0.0005 while the EUR gained 0.0005.

Futures markets were intensely boring overnight with swings and roundabouts on the weather front keeping values largely unchanged. The good was increased moisture forecast for the dryer areas of Ukraine and southern Russia while the bad was the dry continuing for a big part of the EU. The push was the US Hard Red Winter wheat belt which has the pending rain event sliding slightly more to the west where it’s needed most. The corn market has the perfect wire filler; if it goes up its due to China; if it goes down… You get it. The US grower is digging in so offer volume remains thin at best. Investment funds have built a decent short on the demand erosion story and now it’s a game of chicken.

The significance of China agreeing to a deep dive into the origin of the coronavirus is being downplayed in my opinion. The impacts on wider Ag flows of them fighting an investigation would have been significant, especially between China and the US. How they cooperate and deal with any subsequent findings will be the next issue but, for now at least it seems we are trying to move forward. However, perhaps the only path to a resolution on Australian barley tariffs is via the WTO, which is a notoriously lengthy exercise.

The annual US wheat crop tour has been moved this year to a virtual platform. I understand that means lots of cameras and less beer consumption. Initially it will visit some of the more frosted and poor stands so it will be interesting if the market tries to make a story out of this. Trying to get excited about a 950+mbu carryout is tough, regardless of a poor crop condition rating.

.

Australia

Locally, showers pushed through South Australia with parts of the cropping areas recording upwards to 8mm at Lameroo in the SA Mallee region. Parts of Victoria received widespread showers with the Wimmera getting a top up of 5-10mm and little heavier through the Western Districts. The forecast on the BOM 8-day is increasingly becoming more positive for WA that should see some 5-10mm across the wheat belt and15mm or more along the coast. Conditions for the next 8 days also remain positive for Qld and we hope to see those parts get another drink to help planting along.

On the back of the China announcement confirming the tariff, WA growers saw a move higher. New crop grower bids publicly were at $250/t FIS, up $10/t from the start of the week. Trade markets remained relatively unchanged in other zones.

Old crop markets still presenting plenty of offers on wheat and barley but, with little trading in the market, it’s difficult to ascertain value. New crop canola markets were a fraction firmer with offshore markets finding a bid. Increased global hope stemmed from the potential rebound in energy demand and subsequent biodiesel use provided the bid in vegoils.

.

Grain Central: Get our free daily cropping news straight to your inbox – Click here

HAVE YOUR SAY

Your email address will not be published.

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

Get Grain Central's news headlines emailed to you -
FREE!