Markets

Daily Market Wire 24 September 2019

Lachstock Consulting, September 24, 2019
Futures settlements were mixed on Monday.
  • Chicago wheat December contract down 1.25 cents per bushel to 483c;
  • Kansas wheat December contract down 1c to 406.5c;
  • Minneapolis wheat December contract up 13c to 537.25;
  • MATIF wheat December contract up €0.5 to €171.75;
  • Corn December contract up 2.5c to 373.25c;
  • Soybeans November contract up 9.75c to 892.5c;
  • Winnipeg canola November contract up C$0.90 to $448.30;
  • MATIF rapeseed November contract down €0.5 to €386.75;
  • Brent crude December contract up $0.50 per barrel to $63.73;
  • Dow Jones index up 14.92 points to 26949.99 points;
  • AUD weakened to US$0.6775;
  • CAD strengthened to $1.3262;
  • EUR weakened to $1.0993;

Markets and trade

In the wheat pits Chicago settled down -1.25 usc/bu closing at 483usc/bu, Kansas was -1 usc/bu lower to settle at 406.5usc/bu, while Minni rallied 13 usc/bu to go out at 537.25usc/bu. Corn gained 2.5 usc/bu to go out at 373.25usc/bu while Beans were up 9.75 usc/bu to settle at 892.5usc/bu WCE Canola rallied 0.96 CAD/mt closing at 448.36CAD/mt with Matif Canola finishing lower by -0.5 Eur/mt. In outside markets the Dow Jones gained 14.92 points, Crude was up 0.58 bbl the Aussie was 0.000734 higher to settle at 0.67713, the CAD softened 0 while the EUR fell -0.0025

The Chinese negotiation saga continues – last week’s meeting in Washington DC was the meeting before the meeting – the October meeting is being billed as the one that will provide the direction. The market didn’t really get a read on the pre-meeting but another 10 cargoes of beans sold to China have renewed hopes that “this time for sure, Rocky”. It’s a strange situation given the debate over the demand erosion associated with the African Swine Fever – continued reports of massive hog losses coupled with an expanding footprint of infection suggest that feed demand has only one way to go. However, the numbers tell a different story. Implied meal offtake in China is not suggesting the level of impact that many fear – in fact, with margins wide open it’s logical to see the Chinese hog farmer getting busy to capture this once in a lifetime opportunity. But we will continue to debate this given how opaque the data from this region can be.
The spring wheat woes seem to be going from bad to worse – the last 30 per cent of harvest seems destined to be downgraded to feed at best with a bunch of snow now forecast. While an issue for HRS, magnified by the fund short, the Canadian situation could have far reaching implications. In the areas most adversely affected by the latest unseasonal conditions there is >70pc of harvest still to go. Discounted high protein wheat maybe unsuitable for human consumption but maybe perfect for an offshore starch manufacturer – especially with a sizable discount to competing grain located closer to the plant.

Australia

Locally forecast remains dry for next 8-10 days for most parts of the country. Temperatures throughout the Mallee for the next 7 days remain below 25 degree, Growers now in the critical stages where they make the decision to take to grain or cut for hay. One problem is that parts of the crop do not have enough bulk matter to cut for hay. Hay offers have been around $275-280/t ex farm vs harvesting wheat at approx $300/t ex farm for parts of the Mallee and north west Vic. Around the grounds, markets wise we saw bids in the south try to move lower on the back of recent rainfall event. Harvest continues to roll on up in Central Queensland with barley coming off the header and making it’s way onto the Downs.

 

 

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