Markets

Daily Market Wire 25 June 2019

Lachstock Consulting, June 25, 2019

Grain and oilseeds futures closed firmer on Monday;

  • Chicago wheat July contract was up 12c/bu to 538;
  • Kansas wheat July contract was up 13c/bu to 465.5;
  • Minneapolis wheat September contract up 7.5c/bu to 543.5;
  • MATIF wheat September contract up €3/t to €183.75
  • MATIF rapeseed August contract was down €1.25/t at €367.5
  • Winnipeg canola July contract down $C1.30/t to $C452.10
  • Corn July contract up 4.5c/bu to 446.75;
  • Soybeans July contract up 6.25c/bu to 909;
  • Crude oil August contract down US$0.17/barrel to $57.7
  • Dow Jones up 8.41 points to 26,727.54
  • AUD up to 0.6960
  • CAD up to 1.318
  • EUR up to 1.139

Market wrap

Wheat rebounded to start the week, with Chicago closing +12¢ to 538 (N), KC +13¢ to 465.5¢(N), Minny +7.5¢ to 543.5¢(N), and Matif +3€ to 183.75 on the earlier close as markets finally begin to get concerned about the EU/BSEA heat – hot forecasts in parts of Canada aren’t helping things either.  Corn picked up 4.75¢ to 446.75¢(N) while beans were up six and a quarter to 909¢ (N) (Matif rapeseed off a euro and a quarter to 367.5€ while Winnipeg gave up a buck thirty to $452.1).  Meanwhile, despite US President Trump imposing new sanctions on Iran, crude oil has inched back 17¢ to $57.7/barrel WTI (off 40¢ to $64.8 Brent) and the DOW was up 8 points.  The AUD is a tad stronger to 69.6¢, the CAD to $1.318, and the EUR trading at $1.139 with the dollar index off 0.2.

World news

Crop progress figures were out again for the US, calling corn planting up to 96pc nationally and beans at 85pc.  However, there’s little confidence in the market about how well these figures actually reflect fieldwork (especially given the rains across the Midwest the other week) as opposed to prevent-plant decisions.  This is the first time in many years in which the methodology behind planting progress has actually mattered to the market – and many are finally now realizing that they misunderstood the figures for years.  In more “normal” years the difference has mattered little, but in the extreme cases (as is the case in 2019) the differentiation between reduced intentions and increased planting is critical.  We won’t see any real resolution to this discussion on acreage in the near term, though markets are closely looking towards this Friday’s acreage report as a directional guide – the figures there are surveyed during the first two weeks of June so they are not likely to be representative in absolute terms given the last few weeks.  Crop conditions were also in, with corn at 56pc good/excellent (g/e) versus 77pc average and beans at 54pc (vs 73pc avg).  Speculators are already trying to tie these figures into their yield models, but Lachstock suggests that these figures are also likely to be subject to some debate in coming weeks – given the delayed maturity, amount of yet-to-emerge beans, and variance in interpretations likely in this abnormal year (states offices can interpret categories/definitions/assessments differently).

Meanwhile, US wheat harvest figures remain slow, with the national average pegged at 15pc cut (winter wheat) vs 34pc normal – and we make note that Kansas progress was only 5pc (vs 36pc avg).  Crop conditions were down slightly (61pc g/e vs 64pc last week) but with harvest ongoing and the recent weather the questions are more focused on actual harvest yield (so far so good) and quality results (more mixed).  Other global news has been relatively quiet, with SAGO results in yesterday showing booked barley prices from a $186/t to $193 C&F Red Sea, and $200-206 C&F Gulf.  Comments out of India are also noting the improvement in monsoon rains there in recent days – helping kickstart delayed plantings (from the dryness) for their summer crops.

Good luck to any readers in Europe – stay cool and hydrated.

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