Markets

Daily Market Wire 24 January 2020

Lachstock Consulting, January 24, 2020

Corn up 1pc, canola down 1pc; small moves elsewhere

  • Chicago wheat March contract up 2.75 cents per bushel to 580.5c;
  • Kansas wheat March contract down 0.25 cents to 492.25c;
  • Minneapolis wheat March contract up 0.25c/bu to 555.5c;
  • MATIF wheat March contract up €0.5 to €196.25/t;
  • Corn March contract up 5c to 393.75c;
  • Soybeans March contract down 4.25c to 909.5c;
  • Winnipeg canola March contract down C$4.80/t to $473.10/t;
  • MATIF rapeseed February contract down €2.75/t to €407/t;
  • Brent crude March contract down $0.70c per barrel to $62 per barrel;
  • Dow Jones index down  points to 29,160;
  • AUD unchanged at $0.6840;
  • CAD firmer at $1.312;
  • EUR weaker at $1.105.

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Chicago wheat bounced up slightly today on a quieter session across the boards – Chicago ending up 2 3/84¢ to 80.5¢, KC – 1/4¢ to 492.25¢, Minny +1/4¢ to 555.75¢, and Matif up half a euro to 196.25¢.  Corn picked up another five cents to 393 3/4¢ and beans were down 5¢ to 909.5¢ (winnipeg canola -$4.8 to $473.1, Matif -2 3/4€ to 407€).  Crude dropped another buck to $55.6 (Brent $62.0) and the DOW was off nominally (down 26 points).  The AUD is still in the 68.4¢ range, the CAD $1.312, and the EUR $1.105.

Macro chatter continues to speculate about the potential impacts of the coronavirus in China. Anecdotal reports there are indicating that widespread concerns are already being reflected in Chinese New Year holiday spending/activity.  Markets there are generally quiet though with the holiday upon us.  We finally did see a new export sales flash out of the US – with corn to Guatemala and unknown.  Without beating a dead horse though, there’s still nothing in terms of confirmed Chinese demand to spur broader optimism.  South American harvest ideas are also continuing to inch up, although Argentina is forecast to be slightly drier and the later planted beans there will need moisture.

On the upside, the Saudi Arabia Grains Organisation (SAGO) is back with another barley tender (fifteen boats for March/April) and there are expectations that we may see a wheat tender next week there.

We do also note that, although we did not catch it yesterday, Cargill appears to have sold a good chunk of the Algerian tender – increasing the chances that some HRW might be executed if these French logistics do not resolve.  The US weekly export sales report is delayed this week until Friday (with the holiday last Monday) and wouldn’t include the tender anyway; plus it’s optional origin and wouldn’t be declared until closer to execution.

Australia

Rain across the Darling Downs was still extremely patchy.

Forecasts for today and the weekend continue to call for more widespread coverage.

Markets are waiting to see how it fills in, with sorghum ideas all over the ballpark.

Cash markets have continued to push slightly higher although it feels as if there’s been very little traded recently. Bid/ask levels move mostly as people sound out the weather situation.  We’re unlikely to see any Australian barley offered at competitive levels into the SAGO tender this weekend.  Lachstock pencilling that we’re some $20+/t away from being competitive because of the strength of the FAQ and domestic feed barley markets here.

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