Markets

Daily Market Wire 21 April 2021

Lachstock Consulting, April 21, 2021

Row crops, at new highs, led all markets firmer.

  • Chicago wheat May contract up US7.5c/bu to 659.75c;
  • Kansas wheat May contract up 8.75c/bu to 620.75c;
  • Minneapolis wheat May contract up 4.5c/bu to 669c;
  • MATIF wheat May contract up €6.50/t to €223/t ;
  • Corn May contract up 14.5c/bu to 606.5;
  • Soybeans May contract up 22.25c/bu to 1472c;
  • Winnipeg canola May contract up C$30/t to $862.30;
  • MATIF rapeseed May contract up €16.75/t to €547.50/t;
  • US dollar index up 0.1 to 91.2;
  • AUD weaker at US$0.772;
  • CAD weaker at $1.262;
  • EUR weaker at $1.203;
  • ASX wheat May contract down $2.50/t to $291/t;
  • ASX wheat January 2022 down $3/t to $303/t.

International

Grain markets pushed to new highs on row crops and, although we traded back off slightly mid-session, closes were still up substantially. Corn settling up 14.5¢ and beans +22 1/4¢, Matif +16.75€, Winnipeg +$30.  Wheat also firmed on the back of corn strength and the weather concerns, with Chicago +7.5¢, KC +8 3/4¢, Minny +4.5¢, and Matif +6.5€ on the earlier close.  Crude has broken off nearly a buck to $62.4 WTI / $66.6 Brent with blame given to worries about possible coronavirus restrictions cutting demand in India, and the DOW gave up 256 points.  The AUD is back slightly to 77.2¢, the CAD $1.262, and the EUR $1.203 with the DXY bouncing slightly to 91.2.

As May futures expiry is approaching, we’ll shift futures moves quotations to the July contract at the start of next week.

Travel restrictions coming into play globally again saw Hong Kong add travel bans yesterday and the US discourage travel to even more countries. Though not outright banning travel, guidelines were updated to cover some 80pc of the world.

With basis firm across the US for both corn and beans, first notice day next Friday the 30th is rapidly approaching.  Bull spreads have been working but how much of the front-end length is still held by funds.

A new export sales flash in the US reported 0.114Mt old crop corn sold to Mexico.

Brazil has agreed to suspend tariffs on corn, bean, and meal imports from non-Mercosur origins, in a bid to tamp down prices in the domestic market . The plan is set to take effect next week and hold through the end of 2021.

Discussion about the potential import demands from this change has seen increases in mid-year buying interest reported from other destinations. There’s talk of price checking in both the US and Ukraine.

There’s more market talk about the Safrinha drought impacts. The extended run outlooks are nearly bone dry for most of the southern and central areas across the two-week window, although temperatures are slightly cooler which helps a little.  Some private estimates have come down yet again to start the week, but still a wide range of ideas about absolute tonnage impacts

The cold snap in US winter wheat areas has some calling for 20+mbu of production loss. It’s extremely hard to judge the impacts of a cold snap until after weather has warmed up.

Australia

Local markets were a touch firmer yesterday to start the week for new crop. Old crop volume picked up slightly as exporters looked to cover some front end demand.

New crop wheat and barley bids were up $3-4/t.  WA canola was bid $725/t.

Weather maps were holding dry with no substantial changes, but extended runs are pulling back slightly on the rainfall chances for WA into next week.

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