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Daily Market Wire 23 April 2019

Lachstock Consulting, April 23, 2019

Grains and oilseeds mostly closed lower over the Easter period; Thursday’s  and Friday’s settlements as follows.

  • Chicago wheat May contract Thursday down 2.75 to 444.5 cents per bushel and Monday down 8.5 to 435.75c;
  • Kansas wheat May contract Thursday down 0.5 to 420 and Monday down 8.25 to 411.75c;
  • MATIF wheat May contract Thursday down €1.50 to  €183.50, closed Mon.
  • Minneapolis wheat May contract Thursday down 4 to 523.25 and Monday down 14c to 509.25
  • Corn May contract Thursday up 0.25 to 358.5 and Monday down 3.75c to 358.75c;
  • Soybeans May contract Thursday up 1.5 to 880.5 and Monday down 3.5c to 877c;
  • Winnipeg canola May contract Thursday down C$2.10/t to $449.10 and Monday down C$6/t to $443.10
  • MATIF rapeseed May contract Thursday up €2 to €363.50, closed Monday
  • WTI crude oil May contract over the two trading days was up US$1.94 per barrel to $65.70.  Today we switch to reporting the June contract month because it now has the majority of trading volume and open interest.  June on Thursday traded $0.20 per barrel higher to settle $64.07 and Monday traded $1.48 higher to $65.55 .
  • Dow Jones Thursday closed up 100 points at 26559.54 and Monday closed down 48.49 points to 26511.05;
  • AUD down to 0.7136c,
  • EUR down to $1.12595;
  • CAD down to $1.335.

Market news

The wheat futures market continued its downward trajectory overnight as yet another independent crop forecaster increased their ideas around Russian production. Agritel increased their estimate by 3.8 million tonnes (Mt) to 78.8Mt and while well under some of the more ambitious targets the trend is what matters at the moment. CBOT Wheat was down 8.5c/bu to 435.75c, Kansas wheat was down 8.25c/bu to settle at 411.75 while corn closed down 3.75c/bu to finish at 354.75. Soybeans closed done 3.5c/bu to go out at 877c/bu. There is simply a lack of production concern in the northern hemisphere for the moment – some dryness in Europe but nothing to turn the market. The CFTC commitment of traders report confirmed that the spec is still very happy selling wheat, increasing their short position across all 3 wheat contracts. This is becoming the only factor the bulls can hang their hat on – they may eventually be right, there could be a short covering rally – it may however be from a much lower starting point as the market continues to bleed. Outside markets saw the Dow Jones close down 48 points while crude was slightly higher, finishing at $US65.78/bbl. The Aussie was trading at 71.35.

US planting slow

US planting pace for both wheat and the row crops are well behind average dates.  Corn planting was pegged at 6 per cent (pc) vs average of 12pc while spring wheat was only 5pc in the ground vs the average of 22pc. The wheat pace was largely offset by an increase in the national wheat crop condition rating of 2pc good to excellent.

Australia little rain

Domestically we have a bitter sweet start to the week from a moisture perspective – a big part of the Riverina got over an inch and more on the way for north/western Darling Downs and the far western NSW belt. However, with little to no rain forecast from Geraldton to Bendigo and a large part of NSW its hard to get overly excited. There is no question that growers are going hard on dry sowing which makes production estimates extremely difficult. Canola acres will certainly be impacted but it’s far too early to cut meaningful acres out of cereal balance sheets and arguably too early to shift from wheat into barley.

 

Source: Lachstock Consulting

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