Markets

Daily Market Wire 22 September 2020

Lachstock Consulting, September 22, 2020

Wheat and corn futures corrected 2-3pc.

  • Chicago wheat December contract down US20.25 cents per bushel to 554.75c;
  • Kansas wheat December contract down 17c/bu to 487.25c;
  • Minneapolis wheat December contract down 16.5c at 534.75c;
  • MATIF wheat December contract down €1.25 per tonne to €193.25;
  • Corn December contract down 8.75c/bu to 369.75c;
  • Soybeans November contract down 21c/bu to 1022.5c;
  • Winnipeg canola November down C$4.90 to $526.40;
  • MATIF rapeseed November contract down €4/t to €391;
  • Brent crude November contract down US$1.71 per barrel to $41.44;
  • Dow Jones index down 510 points to 27,148;
  • AUD weaker at $0.722;
  • CAD weaker at $1.331;
  • EUR weaker at $1.177.

Markets:

  • What goes up… US futures tapped a vein of selling post Friday’s rally which put a dent in last week’s move. In a day that was all about fear, outside markets also found selling and were driven by increased fears of a second COVID wave through the US. Or is that a third wave, I am not sure what number we are up to?  CNN reported this morning that 28 US states have seen an increase in their case count and the country is on the brink of 200,000 coronavirus deaths.
  • One of the key drivers of the futures rally was the strength in Russian cash values which, despite the capitulation of US futures, were quoted as unchanged. Current winter crop planting conditions are certainly keeping the growers price ideas elevated. GASC tendered after the close which will give us a clear idea what the Russian market thinks about a futures sell off – my guess is not much.
  • As highlighted in LSC’s COVID wire this am, the total funding that has been thrown at agriculture in the US (including the pledge of an additional US$14bill) gets close to an eye-watering US$50billion.
  • Saudi bought 540,000t of barley in its recent tender which, on paper at least, should be filled by Australia. Some concerns regarding Kwinana crop conditions saw that market find a bid. Based off grower bids, which are not attracting much in the way of selling, SA should be the source of Saudi barley supply, not WA.

Australia:

  • New crop markets kicked off the week $5-6/t stronger across the board with wheat leading the way yesterday
  • We saw some late liquidity trade on local futures with January ASX east coast, despite a $7/t trading range on the day, settled at $297/t, one dollar firmer than Friday.
  • Trade bid and offers remain wide through the domestic and port zones
  • Softer AUD/USD this morning as it finally broke and currently sits at .722
  • Wild weather conditions pushed through parts of Southern NSW last night bringing heavy rain with some areas getting upwards to 25mm in just 30 minutes
  • Strong winds also swept across SA with showers of rain to follow and Victoria hanging out for this next back end of the week rain event.

 

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