Markets

Daily Market Wire 23 April 2021

Lachstock Consulting, April 23, 2021

Grains and oilseeds made very strong gains again overnight.

  • Chicago wheat May contract up US37c/bu to 710.25c;
  • Kansas wheat May contract up 36.75c/bu to 667.5c;
  • Minneapolis wheat May contract up 30c/bu to 708.5c;
  • MATIF wheat May contract up €7/t to €238.50/t ;
  • Corn May contract up 25c/bu to 650.5;
  • Soybeans May contract up 36c/bu to 1533.25c;
  • Winnipeg canola May contract up C$1.30/t to $877.60;
  • MATIF rapeseed May contract up €33.50/t to €595.25/t;
  • US dollar index up 0.2 to 91.3;
  • AUD weaker at US$0.77;
  • CAD weaker at $1.251;
  • EUR weaker at $1.202;
  • ASX wheat May contract up $5/t to $302/t;
  • ASX wheat January 2022 up $2/t to $310/t.

International

The bull rally continued to push G&O markets up across the boards. Corn closed up limit on both May and July (expanding to 40¢ limits tomorrow) and beans +36¢ (+$12.6 Winnipeg – N, +6.5€ Matif – Q). Wheat saw Chicago end +37¢, KC +36 3/4¢, Minny +30¢, and Matif +7€ on the earlier close.  On the macro side, crude oil is up a dime to $61.4 WTI / $65.4 Brent and the DOW dropped 321 points.  The AUD has slipped back to 77.1¢, the CAD $1.250, and the EUR $1.201.

As May futures expiry is approaching, we’ll shift futures moves quotations to the July contract at the start of next week.

New jobless claims in the US hit a new multi-month low (back to pre-corona levels) again – supporting the views of those who hope the US economy is at the start of a substantial post-covid recovery across the country.

Options expiry tomorrow is getting a lot discussion. With the rally a number of previously out of the money options are now either in or near the money (delta hedge joys) with one more trading day left.

Another strike is underway in Argentina, this time it’s tugboats.  Talks are reportedly underway but there are no indications as to whether they will be successful yet.

Regular export sales were mixed with 0.24Mt old crop wheat sales (mostly to Mexico), 0.374Mt new crop wheat sales (including a Chinese boat), 0.4Mt old crop corn (again, mostly Mexico – more than offsetting Chinese reductions), and 0.064Mt old crop beans, again with a Chinese cancellation in the mix.

Milo/sorghum sales had a near zero net, with more Chinese demand but all switched from unknown, and two boats of new crop milo sold to China.

The USDA local office in China is calling corn imports there at 28Mt (vs WASDE 24Mt), but down to 15Mt for the coming new season.

Reuters is once again talking about the reported Chinese purchases of French wheat, the business rumoured a few weeks ago. They’re pegging the trade at somewhere over half a million tons, potentially a million, and suggesting that a large part will end up in feed rations.

Chinese buyers have also been reported in the markets for more new season US corn, though we note, no flashes yet, and Ukrainian corn, buying out the curve in substantial fashion.

CBOT is increasing margin requirements on corn and beans by US$125/contract

The USDA will be pushing to pull some 4 million acres back out of crop production through increased CRP enrolment this year in a claimed push against climate change and in direct contrast to their stated goal of supporting new/beginning farmers.

Australia

Local markets getting excited already today with the board rally, and not hurt any by the weaker dollar either.

Anzac Day this weekend – looks to be fairly good weather for the dawn services.

Lachstock will be presenting at today’s GIAV meeting – please note that calls and emails may be delayed.

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