Markets

Daily Market Wire 22 July 2021

Lachstock Consulting, July 22, 2021

Canola settled 3pc lower overnight. Spring wheat fell 2pc. Winter wheats lifted.

  • Chicago wheat September contract up US10.25c/bu to 710.75c;
  • Kansas wheat September contract up 8.5c/bu to 668.75c;
  • Minneapolis wheat September contract down 18.25c/bu to 897.75c;
  • MATIF wheat September contract down €1.75/t to €213.75/t;
  • Corn September contract was unchanged at 571.75c;
  • Soybeans September contract down 1.25c/bu to 1397.75c;
  • Winnipeg canola November contract was down C$29.20/t to $879.90;
  • MATIF rapeseed August contract down €11.50/t to €523.75/t;
  • US dollar index up 0.2 to 92.8;
  • AUD firmer at US$0.735;
  • CAD firmer at $1.257;
  • EUR firmer at $1.179;
  • ASX wheat July contract up $6/t to A$318/t;
  • ASX wheat January 2022 unchanged at $318/t.

International

Mixed moves overnight with winter wheat continuing to firm up. Chicago closed firmer +10 1/4¢, KC +8.5¢, and Minny continuing to trade back off the highs down 18 1/4¢, and Matif -1.75€ on the earlier close.  Corn settled unchanged and beans -1 1/4¢ (Winny -29.2, Matif -11.5€).  Crude oil has jumped backed up nearly three bucks to $70.3 WTI / $72.2 Brent as sentiments start to swing back slightly more bullishly there, and the DOW is up 286 points.  The AUD is trading at 73.5¢ (back up from sub 73 yesterday), the CAD $1.257, and the EUR $1.179.

There’s been an agreement reached to allow completion of the Nord Stream 2 gas pipeline, intended to transfer Russian gas into Germany, though many are questioning if Germany will follow through on related commitments to defend Ukraine that are part of the agreement.

Corn Belt weather is still in the market’s focus. The latest weather runs have added a little to moisture forecasts into the month end for the south western Corn Belt across southern Iowa/Missouri/eastern Kansas though temperature forecasts are still very hot.

US ethanol production this week was 1.03 million bpd, down nominally from prior. Stocks were up sharply by 1.4 million to 22.5 million barrels.

Following yesterday’s proposal to the US Senate to eliminate the US ethanol mandate, reports  have come in about the US White House delaying the existing Renewable Fuel Standard quotas, hoping to find some sort of magical compromise.

Investment bank Goldman Sachs is calling for a rebound across commodities again, though of course hedging their bets on the absence of a resurgence in COVID-19.

Black Sea grain markets reportedly saw some very spot short covering with the earlier harvest delays squeezing a few loads. It should be resolved fairly promptly though with the quick push in recent days of harvest and large tons arriving.

There’s the prospect of a few localised delays because weather maps of the Black Sea region have some variable showers forecast across parts of the south and Ukraine.

Some more delays are also happening in Europe for similar reasons.

Australia

Local markets firmed a fraction yesterday, with wheat up some $3-4/t.

Track/delivered spreads remain fairly wide for new crop with the tight freight market and ideas of another large crop coming.

Weather maps are starting to predict arrival of another storm system in WA and the southeast into the start of August. It is still early days for models that far out but gaining confidence in recent runs.

 

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