Markets

Daily Market Wire 24 October 2019

Lachstock Consulting, October 24, 2019
Soybeans, corn and European rapeseed were a whisker lower while other markets rallied.
  • Chicago wheat December contract up 2.75 cents per bushel to 520.75c;
  • Kansas wheat December contract up 2c to 423.25c;
  • Minneapolis wheat December contract up 3.25c to 542.25c;
  • MATIF wheat December contract unchanged at €181;
  • Corn December contract down 0.25c to 387.75c;
  • Soybeans November contract down 0.25c to 933.75c;
  • Winnipeg canola January contract up C$0.30 to $462.40
  • MATIF rapeseed February contract up €2 to €378.75;
  • Brent crude December contract up $1.47 to $61.17;
  • Dow Jones index down 45.85 points to 26833.95 points;
  • AUD weakened to US$0.6845;
  • CAD strengthened to $1.3079;
  • EUR strengthened to $1.1131;

In the wheat pits Chicago settled up 2.75 usc/bu closing at 520.75usc/bu, Kansas was 2 usc/bu higher to settle at 423.25usc/bu, while Minni rallied 3.25 usc/bu to go out at 542.25usc/bu. Corn gained 0.25 usc/bu to go out at 387.75usc/bu while Beans were down -0.25 usc/bu to settle at 933.75usc/bu WCE Canola rallied 1 CAD/mt closing at 453.6CAD/mt with Matif Canola finishing lower by -0.25 Eur/mt. In outside markets the Dow Jones gained 2.2 points, Crude was down -39.54 bbl the Aussie was 1.49 points higher to settle at 0.68528, the CAD softened -0.0002 while the EUR fell -0.0022.

Market news

Demand; we have found it, and when it rains it pours.

The rally in Russian values was originally thought to be a reaction to the grower putting the shutters up – prices fell sub US$185/t fob and the ability for the originator to find inventory seemingly evaporated.

This was in spite of Russia’s crop estimate increasing. Then the reality of a shorter Kazakhstan crop started to kick in and a short-covering grind higher followed.

Now, the next foot to drop is seemingly Iran. They have put their hand up (according to Reuters at least) looking for 3 million tonnes which is the polar opposite of what the USDA were indicating.

USDA had forecast a big jump in production and virtually no export pull.

The global wheat balance sheet is a moving beast – and when you consider that over 50pc of the global carryover is sitting in China and is largely unavailable to the global consumer, things can move fast.

Back of envelope possible changes to the last WASDE – Australia -2Mt, Argy -1.5Mt, Iran -3Mt, Kazakhstan -2.5Mt = 9Mt in production cuts that would certainly support even today’s elevated levels.

This is not without offset – the USDA needs to also add some production back to Russia and probably the Ukraine but demand is driving this rally – and with destinations like Algeria paying $18/t higher than last tender the global consumer has woken up.

Australia

Various weather maps have some precipitation forecast that has popped up along the east coast, unfortunately it is all a little too late for the winter crops through NSW but will benefit some of the later Victorian crops.

Fire ban day through SA which will hold up harvest but then looks to be a clear run for WA and SA for the next 8 days.

Markets moved lower yet again, ASX Jan wheat settled $344/t while southern delivered markets pushed lower on the bid and offer side.

Canola continues to also push lower with production estimates range from 1.5Mt- to just slightly north of 2Mt questions are asked is this downside short lived what happens internationally and does Aussie do more China business at current values.

 

 

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