Markets

Daily Market Wire 22 December 2021

Lachstock Consulting, December 22, 2021

Monday’s trading sessions saw closing markets gain after significant sell-offs.

  • Chicago wheat March contract up US21.25 cents per bushel to 799c/bu;
  • Kansas wheat March contract up 28.25c/bu to 841.5c/bu;
  • Minneapolis wheat March down 5.75c/bu to 1025.5c/bu;
  • MATIF wheat March contract up €5.25/t to €285;
  • Corn March contract up 7.25c/bu to 598.25c/bu;
  • Soybeans March contract up 18c/bu to 1312.75c/bu
  • Winnipeg canola January 2022 contract up C$9.40/t to $1022.60/t;
  • MATIF rapeseed February 2022 contract up €12.75/t to €738/t;
  • ASX wheat January 2022 down A$1/t to $366/t;
  • ASX wheat January 2023 up $7/t to $373/t.

International

Closes hid the big ranges to the low side on US wheat contracts in overnight trading.

US macroeconomic factors melted down as Goldman reduced its US GDP forecast, citing Omicron and the scale-back of the Federal bond buy. Wheat shrugged that off and focused on the sand-blasting that has taken place throughout the US HRW belt and the fact the Russian export quota is still not set. Throw in some speculation around HRW pricing into Iraq, and fundamentals win.

Black Sea wheat settled up US$0.25/t.

Technically, wheat looks to be forming a base. Russia/Ukraine tension isn’t going away and the constant risk of a geopolitical blow-up deserves risk premium. Grain demand has generally been agnostic to COVID – demand hasn’t missed a beat. Energy, however, has been flapping in the winds of infection rates globally, and with Omicron shifting gears, it’s under the pump.

China’s central bank cut its rates for the first time in 20 months as it tries to stimulate its economy.

Australia

In Western Austrralia, 20pc more ASW than normal is being seen, and in a crop of record size, at the expense of APW and higher grades. South Australian quality has seen a 20pc swing from Hard wheats to “other” which is largely going to be grades of AGP and below. Quality in eastern states is anecdotal, but Victoria seems to be okay for the most part, New South Wales is estimated to have 7 million tonnes or more of AGP and lower wheat, while Queensland quality for the most part is pretty good. The lower grades in SA and NSW are all about falling number problems; the test weight and protein have been okay in many cases but falling numbers is a big issue.

Local markets kicked a fraction yesterday. Wheat was firmer on the cashboards by A$2-5/t, and started to find a bid over the day along the east coast, with some lower-grade wheat trading

Barley was $1/t firmer, and canola was up $3-4/t

Viterra’s latest receivals released indicated another strong week of harvest activity across South Australia, with 922,270t taken in. One to note now is that its canola receivals have broken a record with the bulk handler network taking in more than 465,000t for the current harvest.

Weather forecast maps continue to predict rain for Queensland and northern New South Wales, while the rest of the country continues to get a run at harvest still for the next eight to 10 days.

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