Markets

Daily Market Wire 22 January 2020

Guest Author, January 22, 2020

Wheat firmer and oilseeds weaker

  • Chicago wheat March contract up 11 cents per bushel to 581.5c;
  • Kansas wheat March contract up 5.75 cents to 500c;
  • Minneapolis wheat March contract up 2.25c/bu to 562.25c;
  • MATIF wheat March contract up €2.25 to €198.25/t;
  • Corn March contract down 1.75c to 387.5c;
  • Soybeans March contract down 13.75c to 916c;
  • Winnipeg canola March contract down C$4.20/t to $476.80/t;
  • MATIF rapeseed February contract down €1.50/t to €410/t;
  • Brent crude March contract down $0.60c per barrel to $64.60 per barrel;
  • Dow Jones index down 152 points to 29,196;
  • AUD weaker at $0.6850;
  • CAD weaker at $1.307;
  • EUR weaker at $1.108.

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Wheat continued to rally amidst the firming global cash markets – Chicago wheat picked up 11¢ to 581.5¢, KC +5 3/4¢ to 500¢, Minny +2 1/4¢ to 562 1/4¢, and Matif was up 2.5€ to 198.25€.  Beans sold off 13 3/4¢ to 916¢ while corn held up slightly better with support from the wheat moves to close -1 3/4¢ to 387.5¢ (Winnipeg canola dropped $4.2 to $476.8, Matif -1.5€ to 410€).  Crude oil is slightly weaker to $58.3 WTI/$64.6 Brent and the DOW dropped 152 points.  The AUD’s continued to trade slightly weaker to 0.685, the CAD to $1.307, and the EUR at $1.108.

 

Brexit is a week and a half away now – with the latest news there reporting that the House of Lords was pushing for amendments to the Brexit bill.

Markets remain reasonably comfortable with the upcoming transition. The uncertainty over whether it would happen is almost all gone, though we’re watching for some headline volatility as the date draws closer.

We’ve also got macro-political risks with the ongoing US impeachment inquiry with conflicting goals from both sides and lots of grandstanding so far.

In broad-stroke terms the Republican led Senate wants to speed the trial through, while Democrats in the House want an extended and heavily broadcast trial.  Politics politics politics. It does look unlikely that US President Trump will be convicted, but there’s no indication the politics will quieten down for a while. It is an election year, after all.

Chinese trade deal terms continue to see air time and discussion, but we thought it was worth noting comments from the US Sec of Ag that he expected Chinese purchases to happen sooner rather than later, in order to meet their agreed upon purchase levels.  Logistically that would need to be the case, but it also suggests that there may be more reaction from the US government if Chinese purchases do not start promptly.  China is about to go into their New Year’s celebration week, so will they be in the market after the celebrations are done?  Happy holiday to all!

No word on the Algerian tender yet, but cash markets in the EU/Black Sea continue to ratchet higher with the French rail strike showing no sign of ending.

US export inspections were about as expected, with 346,000t of corn, 1.199Mt beans including ten boats to China and 435,000t of wheat.  There were no Chinese milo boats reported in the mix, although there have been rumours about some set to load. They would have appeared as “unknown” sales if that were true.

Australia

Australian markets have firmed to start the week, following the global move, with WA APW1 wheat trading in the $380/t FIS range later yesterday afternoon.

Rain outlooks are still very positive for the Darling Downs and Northern NSW, and more and more discussion of sorghum ideas which are especially tempting for those with large dollar amounts of sorghum seed sitting waiting.  Still, recent rains were patchy and not all have had the moisture yet, so we will see if the current forecasts are realized for the coming storm.

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