European wheat firmed 1pc, as did US corn futures. All markets continued lower.
- Chicago wheat July contract down US4c/bu to 675.25c;
- Kansas wheat July contract down 8.75c/bu to 625c;
- Minneapolis wheat July contract down 2c/bu to 695.5c;
- MATIF wheat September contract up €2.25/t to €213.75/t;
- Corn July contract up 6.25c/bu to 664.5c;
- Soybeans July contract down 5c/bu to 1533.25c;
- Winnipeg canola July contract down C$30/t to $903.20;
- MATIF rapeseed August contract down €0.50/t to €528/t;
- US dollar index down 0.4 to 89.8;
- AUD firmer at US$0.777;
- CAD firmer at $1.206;
- EUR firmer at $1.223;
- ASX wheat July contract down A$4.50/t to $305/t;
- ASX wheat January 2022 down $1/t to $306/t.
Chicago wheat continued to slide, down another 4usc/bu to close at 675.25usc/bu but it was Kansas wheat that led the charge, falling 8.75usc/bu to settle at 625usc/bu. Spring wheat was more muted, only falling 2usc/bu. Meanwhile corn rallied 6.25usc/bu to settle at 664.5usc/bu. Wheat/corn spreading still in play. Soybeans fell 5usc/bu to close at 1533.25usc/bu, Winnipeg canola fell CAD$30/mt to close at CAD$903.20/mt. In outside markets the cypto sector rebounded with many of the NFT’s up 4-5% overnight, the Dow was up 188 points and the Aussie was trading at 0.7770.
The great divide – Corn rallies, wheat breaks. Wheat fundamentals are on the improve, well, from a US perspective at least. Huge yields showing up on the HRW tour were the main sentiment driver. Kansas wheat yields were pegged at 58.1bu/ac (just under 4t to the ha) vs the 5-yr tour average of 43.1bu/ac. Meanwhile, the Russian production numbers are seemingly on the slide. The USDA attaché has pegged the Russian crop at 77.5 million tonnes (Mt) vs the WASDE at 85Mt. Recorded rainfall through the higher yielding parts of the Russian belt have been plentiful – too much some are arguing while parts of the spring wheat belt are looking for a drink. Too much rain is a hard fundamental to buy in ags.
Chinese insatiable corn appetite continues. Another 1.224Mt flashed overnight for new crop which puts the US-only program to China the sunny side of 10Mt – vs a full year USDA total Chinese import program of 26Mt. Seems light based on current pace.
India on Wednesday reported more coronavirus deaths in a single day than any other country at any time during the pandemic, while infections continued to spread through vast rural areas with weak health systems. The Health Ministry reported a record 4,529 deaths in the past 24 hours, driving India’s confirmed fatalities to 283,248. It also reported 267,334 new infections, as daily cases remained below 300,000 for the third consecutive day
Initial claims for US unemployment benefits fell 34,000 to a seasonally adjusted 444,000 for the week ended May 15, the Labor Department said. That was the lowest since mid-March 2020 and held claims below 500,000 for two straight weeks. Economists polled by Reuters had forecast 450,000 applications for the latest week. Claims remain well above the 200,000 to 250,000 range that is viewed as consistent with healthy labour market conditions. They have dropped from a record 6.149 million in early April 2020.
New crop cash markets again slipped over the course of the trading day yesterday to be off another $2-3/t across the board. Wheat now down $10-12/t over the course of the week. Barley in Victoria caught a bid on the new crop and was firmer by $1-2/t. Canola values were off hard with delivered into the east coast crushers down $15-20/t.
Current crop markets again remain stagnant, and the liquidity just continues to turn over to meet the nearby demand. We continue to see delivered market trade for June/July, while system-based grain ticks over slowly. The spreads remain wide on track-to-delivered out to $25/t, the issue remains on logistics and ability to outturn that grain back into port or domestic home as trucks and trains still providing headaches around Australia.
LSC vessel lineups are still showing 4Mt of total grain with ETDs in May. The June projected sailings currently dropping back to 2.2Mt. We would expect to see some May roll into June given the logistical challenges out there and it does sound like the wheat forward book remains strong in June/July.
Source: Lachstock Consulting