Daily Market Wire 25 February 2020

Lachstock Consulting February 25, 2020

Monday’s US wheat futures fell significantly; the third day.

  • Chicago wheat March contract down 14.25¢/bu to 536.25¢;
  • Kansas wheat March contract down 16.25¢/bu to 452.25¢;
  • Minneapolis wheat March contract down 12¢ to 514¢;
  • MATIF wheat March contract down €2.75/t to €192.25/t;
  • Corn March contract down 4.25¢/bu to 372.25¢;
  • Soybeans March contract down 15¢/bu to 874.25¢;
  • Winnipeg canola March contract down C$8.60/t C$449.70/t;
  • MATIF rapeseed May contract down €7.50/t to €392.50/t;
  • Brent crude April contract down US$2.20 per barrel to $56.30;
  • Dow Jones index down 1032 points to 27966;
  • AUD firmer at $0.66;
  • CAD weaker at $1.328;
  • EUR firmer at $1.085.

Market news

Markets collapsed across the board overnight on broadly spread macro coronavirus worries, with the DOW off over a thousand points and contagion throughout commodities.  Chicago wheat ended down 14 3/4¢ to 536 1/4¢, KC -16 1/4¢ to 452 1/4¢, Minny -12¢ to 514¢, and Matif down two and three quarter euros to 192.25€ on the earlier close.  Corn  dropped four and a quarter to 372 1/4¢ and beans -15¢ to 874 1/4¢ (Matif -7.5€ to 392.5€, Winnipeg -$8.6 to $449.7).  Crude ended down two bucks (it was off slightly more mid-session) to $51.4 WTI / $56.3 Brent and the DOW -1032.  The AUD’s around 66.0¢, the CAD $1.328, and the EUR $1.085.

How much damage will coronavirus do?  Markets are now fully into “spooked” mode, and back to speculating just how big the slowdown may be.  Chinese officials claimed that ~90pc of industrial activity is back and running in key manufacturing provinces, but that’s calmed no-one with questions about how accurate their estimates are.  Deaths have occurred in Italy and there are more cases in new countries. We seem well past the initial “containment” possibility and it’s an open question about how big the slowdown may be if the virus continues expanding, quarantining people in new countries.  There’s lots of speculation meantime, but without anything to ease concerns markets have turned heavily pessimistic.

Saudi tender results out late yesterday saw 715k booked in the low $240s per tonne Red Sea / $250s Gulf – about as expected and it will most likely execute ex-German/Baltic at these prices.

We also finally saw an export sales flash on beans, but it was 164,000t to Mexico and there’s no Chinese demand to encourage the bulls.  US soybean weekly export inspections were also on the weaker side, with beans 595,000 (thoughts up to a million), though corn and wheat both came in on the higher end of expectations, wheat 412,000t and corn 913,000t.

A few more rain delays were reported on the soybean harvest in Brazil, pegged at about a third complete nationally. But overall the harvest pace is running a bit above average and yield results are still positive.





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