Markets

Daily Market Wire 23 April 2020

Lachstock Consulting, April 23, 2020

Wheat weaker, corn and beans firmer.

  • Chicago wheat May contract down US3.75¢/bu to 543¢;
  • Kansas wheat May contract down 6.75c to 490¢;
  • Minneapolis wheat May contract down 1.25c to 506.75¢;
  • MATIF wheat May contract down €0.5 to €203.25;
  • Corn May contract up 8.25c/bu to 317.25¢;
  • Soybeans May contract up 4¢/bu to 834.75¢;
  • Winnipeg canola May contract up $C1.80 to $453.70/t;
  • MATIF rapeseed May contract down €0.50/t to €366.25;
  • Brent crude June contract up US$1.04 per barrel to $20.37
  • Dow Jones index up 457 points to 23476;
  • AUD firmer at $0.6310;
  • CAD firmer at $1.416;
  • EUR weaker at $1.082.

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Markets

Wheat continued to ease on Wednesday in the US, with Chicago down 3 3/4¢ to 543¢, KC -6 3/¢ to 490¢, Minny -1 1/4¢ to 503 3/4¢, and Matif -0.5€ on the earlier close to 203.25€. Row crops firmed on rumours of potential massive Chinese buying. Corn was up 8 1/4¢ to 317 1/4¢ and beans up 4¢ to 834 3/4¢ (matif off half a euro, winnipeg up a buck eighty to $453.7).  Crude has jumped after worries about potential conflict in the middle east following US President Trump’s announcement that US vessels would no longer tolerate harassment from Iranian vessels.  WTI ended up nearly four bucks to $13.8 (and moving over $14 into the night sessions), Brent was up a buck to $20.7, and the DOW was up 457 points.  Currencies have been mostly steady, with the AUD trading at 63.1¢, the CAD $1.416, and the EUR $1.082.

N.B.  With May futures delivery approaching, we’ll be rolling relevant contracts and figures on Monday in our comments

On the ag side, the excitement was all about the rumoured potential for 10 and 20 million tonnes of US corn and bean purchases respectively to refill state reserves.  Although there were three boats of old season beans to China flashed and talk of another 5-6 traded, so far there’s been nothing big enough in the cash markets that Lachstock has seen or heard discussed to suggest the larger 10/20 Mt figures. As with all the China business recently, the bulls are hoping and the bears are licking their lips in anticipation of disappointment.  Dalian corn has continued to hold recent strength in the RMB2,000/t range, recent year highs, and ideas about private imports (TRQ) have been circulating. This could potentially include feed barley, though the barley anti-dumping review remains a factor.

US ethanol production was off yet again, “only” to 563,000 barrels per day this time.  The slowing of the decline has fuelled hopes that production and, implicitly, corn demand, will stabilise around here.  Rumours of a few more plants reporting positive margins helped by DDG markets are also supportive to a slow-down in the drop.

Also supportive of price, Brazil’s safrinha corn crop continued to see some weather problems with some central corn areas in need of prompt moisture.  None is on the forecasts.  Similarly, Europe and the Black Sea region weather forecasts leave much to be desired. Continued dryness, tempered slightly by cooler days in Russia, and no relief even into two-week weather maps.

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Australia

Australia is looking into the Anzac Day weekend with markets still weighted towards the offer side and bids not coming in style to meet them.  Feed markets are particularly slow on the bid side, with speculation around that average coverage is higher than most had expected.  Field work continues to be helped by good weather. There are a few weather concerns around but for the most part the focus is on getting the crop planted.

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