Markets

Daily Market Wire 23 June 2021

Lachstock Consulting, June 23, 2021

Canola and spring wheat firmed while lower prices were registered by corn, other wheats and beans.

  • Chicago wheat September contract down US10c/bu to 655c;
  • Kansas wheat September contract down 3.25c/bu to 606c;
  • Minneapolis wheat September contract up 15.25c/bu to 782.75c;
  • MATIF wheat September contract down €0.25/t to €207/t;
  • Corn September contract down 18.25c/bu to 553c;
  • Soybeans September contract down 16c/bu to 1309.75c;
  • Winnipeg canola November contract up C$7.70/t to $707.90;
  • MATIF rapeseed August contract up €4.25/t to €494.50/t;
  • US dollar index down 0.2 to 91.7;
  • AUD firmer at US$0.756;
  • CAD firmer at $1.231;
  • EUR firmer at $1.194;
  • ASX wheat July contract up A$1 to $296/t;
  • ASX wheat January 2022 up $2/t to $304/t.

International

Minny held it’s own last night after the poor crop conditions reports, even as the rest of the market sold off – Minny closed up 15.25¢, KC -3 1/4¢, Chicago -10¢, and Matif down a quarter euro. Corn was off 18 1/4¢ and beans -16¢ (Matif +4.25€, Winnipeg +$7.7) with a slight improvement to the weather maps outweighing more rumours of Chinese bean purchases.  Macro markets saw crude off to $73.1 WTI / $74.8 Brent and the DOW up 68 points.   The USD has continued to weaken back off slightly, with the AUD trading up to 75.5¢, the CAD $1.231, and the EUR $1.194 after the US Fed chairman made comments to the government there that they would wait until they’ve confirmed that excessive inflation is happening before raising rates.

US Federal Reserve chair Jerome Powell’s comments to the US House were closely watched as a better guiding indicator to the interest rate intentions of the Fed after the last FOMC meeting. But now that markets have breathed a sigh of relief that interest rates do not appear set for immediate rise we’re back to the ongoing debate about inflation, how big, and if it is not coming, how confident can we be in this economic recovery?

The latest weather maps for the US turned slightly wetter again for later this week/weekend, with current models over 3″ for most of Illinois, Indian, and eastern Iowa.

Still fairly dry forecasts for the northern Plains and Canadian Prairies, although there’s some improvement off the storm coming across the Rockies and chances of light showers added on that may string the crops along but won’t be adding any bushels.

The rumour mill has Chinese buyers back for another hundred thousand to half a million tons of US beans – depending on whom you speak to.  No new export sales flashes yet though.

Next week’s acreage and stocks reports, scheduled next Wednesday US time, are starting to attract more attention. There are plenty of questions about the possibility of surprises. The trade has been pulling back a bit to assess risks to their balance sheet scenarios in the event of any surprises.  Given the tightness in old crop corn stocks this year, and the tight forward balance sheets, they’re looking to be even more well-watched than normal this year.

There’s more talk of damaged/off grade crops and disease problems in southern Russia and parts of Ukraine. Overall volume still is to be seen, but discounts have held nice and wide for feed wheat. Cash markets have remained fairly slow with the slow start to harvest, but activity is starting to pick up a bit as crops ripen and loadings approach for early boats.

Australia

Local markets still fairly quiet with generally wide bid/offer spreads, although some old crop bids have picked up a tick with more interest to cover sales as the year wraps up.
The BOM’s still calling for 20-25mm across central NSW, and slightly less for central Victoria and coastal areas in SA.
The AUD continues to trade off the overall US dollar story globally, but the kick back up through yesterday/overnight isn’t helpful to grain market.

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