Markets

Daily Market Wire 24 March 2022

Lachstock Consulting, March 24, 2022

US wheat futures eased 1pc, soybeans, meal, oil and EU wheat firmed 1pc. Canola markets settled 1-2pc lower.

  • Chicago wheat May contract down US12.5cent per bushel to 1105.75c/bu;
  • Kansas wheat May contract down 5c/bu to 1111.5c/bu;
  • Minneapolis wheat May down 6.5c/bu to 1089.25c/bu;
  • MATIF wheat May contract up €5.50/t to €384.50/t;
  • Black Sea wheat July contract down $4.50/t to $355/t;
  • Corn May contract up 4.75c/bu to 757.75c/bu;
  • Soybeans May contract up 22.25c/bu to 1718.75c/bu;
  • Winnipeg canola November 2022 contract down C$19.40 /t to $938/t;
  • MATIF rapeseed November 2022 contract down €10.75/t to €750/t;
  • ASX July 2022 wheat contract down A$9.50 to $410/t;
  • ASX Jan 2023 wheat contract up $3/t to $410/t;
  •  AUD dollar firmer at US$0.750.

 

International

Soybeans finally rallied above $17/bu, the highest close since 2012. The set-up is nothing short of explosive. A shorter South American balance sheet, coupled with what is mainly a vegoil problem falling out of the Russia/Ukraine war, sprinkled with renewed and relentless Chinese buying. The guessing game around Brazilian soybean production has now taken a back seat to the cuts on Ukraine production and exports.

European agroeconomic market researcher Stratégie Grains cut Ukraine corn production estimates by 17 million tonnes (Mt), corn exports by 12Mt and cut wheat production by 13Mt.

Energy markets are once again calculating what the real cost is to their trading business as the war shows no sign of ending. Reports focusing on the margin capital required by these traders quickly become frightening and points to increased concerns around liquidity. Simply, hedge markets are outpacing physical markets and while many of these positions would eventually be profitable the cashflow required to hold them may force an early exit and have a ripple effect throughout the whole energy sector. Given the EU’s reliance on Russia, it makes sense that the real pain is in front of us.

Australia

Local markets have been mostly unchanged amid slow and steady liquidity. Buyers continued to show interest in east coast wheat.  Barley values were also largely unchanged across the board, with some interest in Victorian malting and feed.

Canola markets were also unchanged through depot bids, while delivered-port bids for May were a fraction stronger.

We saw the AUD/USD sail above its trendline resistance on the daily timeframe and push to new three-monthly highs, and now trading a touch under US75 cents.

 

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