Markets

Daily Market Wire 23 November 2021

Lachstock Consulting, November 23, 2021

Australian conditions played a part overnight in international wheat markets lifting almost 3 per cent. EU rapeseed was 2pc firmer, corn and soybeans rose 1pc. US dollar firmed.

  • Chicago wheat December contract up US22.75 cents per bushel to 845.75c/bu;
  • Kansas wheat December contract up 27c/bu to 861.75c/bu;
  • Minneapolis wheat December up 13.25c/bu to 1023.5c/bu;
  • MATIF wheat December contract up €9.25/t to €309/t;
  • Corn December contract up 6c/bu to 576.75c/bu;
  • Soybeans January contract up 11c/bu to 1274.25c/bu
  • Winnipeg canola January 2022 contract up C$16.20/t to $1021.80/t;
  • MATIF rapeseed February 2022 contract up €15.75/t to €693.50/t;
  • US dollar index was up 0.6 to 96.6;
  • AUD weaker at US$0.723;
  • CAD weaker at $1.270;
  • EUR weaker at $1.124;
  • ASX wheat January 2022 up A$19/t to $405/t;
  • ASX wheat January 2023 up $10/t to $400/t.

International

CME wheat rallied 22.75 usc/bu, Kansas wheat was up 27 usc/bu while Minni wheat increased 13.25 usc/bu. Matif wheat rallied €9.25/t and Black Sea wheat was quoted USD$0.50/t higher. Fresh contract highs and another close not eclipsed since 2012 (incidentally, Chicago spot wheat got to a high of just under 950usc/bu in July 2012). Chicago corn added 6usc/bu, China corn was basically unchanged while down in South Africa, yellow maize added 1.1pc. Soybeans increased 11.75usc/bu, meal was a rare negative close, down USD$2.2/st while bean oil added 1.25usc/bu. Matif canola rallied €15.75/t while Winnipeg canola rallied C$16.20/t in the Jan contract. The Aussie finished at 0.7226, crude was basically unchanged, and the Dow added 17.25 points.

Australian wheat production woes hit the wires. Given the global reliance on Australian wheat production due to adverse northern hemisphere seasons it makes sense that world values will ebb and flow with Australia’s’ harvest prospects. For many areas, harvest conditions have been wetter than the infamous 2010/11 season – one where wheat was so badly damaged some feed grain was unusable. This is a difference season – with a later than normal season some wheat that would ordinarily be harvested is still green – however, with over 150mm in the 15-day forecast for parts of NSW the market is asking the “what if” question

The rumour mill would suggest the global feed grain buyer is stepping in to take advantage of both lower protein and potentially downgraded harvest. China is a constant theme with many indicated they have been shopping for AGP type wheat out of the west. Grade spreads in Australia tell the story. With lower grades trading at historically wide discounts to APW1. Additionally, APH2 hit its widest spread to APW1 in many areas. For many growers in Australia, these spreads don’t get fixed with the buyer until they deliver their grain.

US cattle prices hit 4-year highs amid growing inflation concerns with tight supplies and solid exports driving values higher

The once in a century storm that hit the southwest of Canada is not over it would seem. After washing out several roads and major rail lines Vancouver is due to get another 40-50mm.

Australia

Local markets kicked off the wheat in a explosive fashion driven by weather. With upcoming forecast maps for this week’s rain event across the east coast it has a bulled-up quality wheat market.

ASX January wheat traded in the range of $400-410 yesterday for smalls and finished the day out up $19/t from previous trading day at $405/t as the market gets in to secure milling wheat. Grower cash board bids were also up across the country with wheat up $5-10/t on APW and the AGP spreads continued to widen over the day.

Barley continued to gain a bid through South Australia and Victoria with track and delivered markets up $4-5/t. Canola markets were softer and came off $10/t through the track and delivered domestic crush bids.

Harvest through northern NSW and out to west of Moree all comes to a standstill, for most part of central NSW we see little harvest action. Yesterday we saw some harvesting through southern NSW going on canola while growers can before the front hits on Wednesday then it is a waiting game.

Victorians’ harvest continues to tick along out in the Mallee with growers on their pulses and happy with the yields so far. South Australian growers will see some scattered showers of rain push across the state today which will delay things while WA continues to make a dent in their program.

 

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