Markets

Daily Market Wire 21 March 2019

Lachstock Consulting, March 21, 2019

The US dollar fell hard overnight, lifting most dollar-denominated commodity prices; settlements as follows;

  • CBOT Wheat May contract was up 8.25c to 464.75
  • Kansas wheat May contract up 8.25c to 444c
  • Corn May contract up 0.5c to 371.25
  • Soybeans May contract up 2c to 906c
  • Winnipeg canola May contract was up C$0.20 to C$464.70
  • MATIF rapeseed May contract up €2.50/t to €358.50
  • Dow Jones down 26.72 points to 25,887.38
  • Crude oil May contract up $0.80 to 60.23
  • AUD up to 0.7120c,
  • CAD up to 1.328,
  • EUR up to 1.142.

Commentary on markets

Wheat bounced up overnight on the board, with Chicago and KC both +8¢ to 464 3/4 and 444¢ respectively and Minny +6¢ to 571.5¢. Matif was off a quarter of a euro to 189€ on the earlier close and corn was up a quarter of a cent to 371.5¢. On the oilseeds side, beans picked up 2¢ to 906¢ while winnipeg canola was up 20¢ to 464.7 and Matif rapeseed jumped 2.5€ to 358.5€. Crude oil has jumped some 80¢ to $59.8 after lower inventory figures in the US (Brent +90¢ to $68.5/barrel) while the DOW dropped 125 points amid mixed opinions regarding the US economy after the Fed left interest rates unchanged yet again and called for no more changes through the rest of this year. Global economic concerns have also been picking up, with economic analysts noting shipping company fedex’s extremely poor global revenue outlook. The US dollar is off against global currencies amid the questions, with the dollar index down 0.5 to 95.2 – the AUD is up to 71.2¢, the EUR to $1.142, and the CAD to $1.328. Meanwhile, the GBP is off slightly amid Brexit politics. The UK has officially requested a delay, which the EU appears set to accept . . . but only if the UK will approve a withdrawal plan in parliament (which has already rejected Prime Minister May’s plan twice).

Russia set export quality talk; matey US Brazil statement gives Argy cold shoulder

Comments out of the Russian Ag Ministry suggested that they will work with existing grain exporters in their plans to revise the export market, but will make unspecified changes to the way the trade operates – and reportedly aim for higher quality standards on exports. Meanwhile, a statement out after meetings between the US and Brazilian presidents has supported the implementation of a previously discussed 750 kmt duty free quota – not something that’s been well received by Argie wheat farmers (who traditionally fill nearly all of Brazil’s import needs). Speaking of Brazil, ABIOVE(the local crushers organization) has cut their bean crop estimate by 1 MMT to 116.9 MMT as harvest looks to pick back up in the dry coming weather.

US planting polls call bean acres down, corn up

Markets continue to speculate about new season plantings in the US as we look forward to the prospective plantings report at the end of March. Allendale released their annual survey today, calling for a 2.3 million acres increase in corn to 91.5 milion, with beans down to 84.3 million (-4.9 million YOY, including some switches to spring wheat and minor crops). Other polls are suggesting a less dramatic drop in bean acres. Prevent-plant acres are the second question – and Lachstock notes that there is some more rain on the extended forecast across eastern Nebraska/Iowa with 1-2″ in some models – exactly what they don’t want in flooded areas.

Australia

Weather models have pushed back a bit of rain onto the maps for southern Queensland off the edge of Cyclone Trevor – but still nothing to be seen further south. Lachstock does note that a coalition of grain industry groups has put out a joint statement regarding the Chinese barley anti-dumping investigations and the ongoing risks there. This is something which Lachstock has been following closely for several months now, and are happy to discuss with any clients who are concerned about the situation.

Source: Lachstock Consulting

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