Daily Market Wire 22 March 2019

Despite stronger US currency, Thursday night’s futures markets built on the previous session rally; settlements as follows;

CBOT Wheat May contract was up 1.75c to 466.5
Kansas wheat May contract up 3c to 447c
Corn May contract up 4.75c to 376.25
Soybeans May contract up 4.5c to 910.5c
Winnipeg canola May contract was up C$3.50 to C$468.20
MATIF rapeseed May contract up €1/t to €359.50
Dow Jones up 216.84 points to 25,962.51
Crude oil May contract down $0.25 to 59.98
AUD down to 0.71c,
CAD down to 1.338,
EUR down to 1.135.

Commentary on markets

Wheat’s rally yesterday failed to hold traction through the overnight, selling off into the open before picking up slightly mid-session to close up 1 3/4¢ on Chicago (466.5¢) and 3¢ on KC (447¢). Minny saw some profit taking after the run up in both basis and the board, easing a quarter of a cent to 517 1/4¢ while Matif was unchanged in the earlier close at 189€. Corn picked up 4 3/4¢ (376 1/4¢) after good export sales (talk was also higher on domestic basis levels today) and ongoing planting concerns, and beans pushed back after disappointing export sales to close +4.5¢ to 910.5¢. Matif rapeseed was up 1€ to 359.5 and Winnipeg canola picked up $3.5 to 468.2. The DOW pushed over 26 thousand briefly overnight (though is now down to just under that level), up 250 points, while crude has given up 30¢ to just under $60 (Brent off 76¢ to $67.9). Global currencies have given back most of yesterday’s gains vs the dollar, with the AUD at 71.0¢, the EUR at $1.135, and the CAD weaker to $1.338.

Riyadh calling for barley

Saudi Arabia’s SAGO is FINALLY back in the barley markets, issuing a tender last night for second-half May and full June arrivals. Total volume at 720 kmt was well below what the bulls where hoping for – though of course there are some hoping they’ll ultimately book more. At current prices it is unlikely to see any Aussie barley booked (though under the optional origin terms of the tender there is always possibility that some works in later) as EU/BSEA positions jockey for the much awaited demand.

Sales talk

Export sales out in the US today were about as expected for wheat (with 437 kmt combined oc/nc sales, vs ideas in the 250-500 range) and corn (915 kmt, vs ideas between 600 and 1 MMT) but extremely disappointing on beans at 335 kmt (vs ideas closer to 1 MMT) with only 142 kmt of Chinese demand to be seen. We do note that there was another sorghum boat sold to China though (there are now 2 pmxs outstanding). Further on wheat, in their ongoing attempts to open new markets, a container of Russian wheat has been shipped to Algeria – where the grain ministry there will test the wheat to see if they like the quality. If Russian wheat becomes accepted, it will further increase competition between Russian and EU/US (and to some degree Argy) wheat in what had previously been comparatively inelastic markets. Russia has also reportedly recently finalized phytosanitary agreements with China to allow for future meal shipments there – not a significant flow, but part of the broader shift in acceptance.

US corn belt remains wet, planting endangered

A reminder that the USDA’s next (potentially) market moving reports are out next Friday with the release of Prospective Plantings for spring crops. Expanded flood forecasts across the northern and central corn belt are continuing to concern traders though, with many starting to discount total acreage figures below what will be reported in the upcoming report as they attempt to estimate prevented planting acres.

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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