Markets

Daily Market Wire 25 March 2021

Lachstock Consulting, March 25, 2021

Wheat broke lower, markets chasing a new story to continue supporting wheat but not finding it.  Crude oil bounced, making up almost all of yesterday’s losses. The blockage of the Suez canal interfering with transit and delaying arrival of vessels from the middle east to Europe justifying the rally.  The DOW was off 3 points.

  • Chicago wheat May contract down US10c/bu to 624.75c;
  • Kansas wheat May contract down 5.75c/bu to 576.25c;
  • Minneapolis wheat May contract down 3.25c/bu to 627c;
  • MATIF wheat May contract down €2.50/t to €218.50;
  • Corn May contract up 2c/bu to 553.25c;
  • Soybeans May contract up 9.5c/bu to 1432.75c;
  • Winnipeg canola May contract up C$13.30/t to $796.10;
  • MATIF rapeseed May contract up €4.50/t to €525.25;
  • US dollar index up 0.1 to 92.5;
  • AUD firmer at US$0.758;
  • CAD firmer at $1.258;
  • EUR weaker at $1.181;
  • ASX wheat May contract up A$5.20/t to $286.20;
  • ASX wheat January 2022 up $5/t to $295.50.

International

Grains and oilseeds are still in limbo ahead of next week’s planting report.  Plenty in the market are looking for a reason to see a continued upward step in prices, and last week’s Chinese corn business did help, but there are no crystal balls for the acreage report.  Various estimates being circulated have ranges of +/-2 million acres per crop plus variances in the total pie, each of which is enough to potentially change the outlook for next season’s row crop markets.

Weekly US ethanol production in the US was down again to 922,000 bpd compared with a recent weekly high of 971,000bpd.  Stocks were up, rising for the first time in a month after the export driven drawdowns.

Tonight’s weekly export sales reports in the US will be for the week ending 18 March. It should include all of last week’s Chinese flashes (as flashes hit the press the day following) of 3.9 million tonnes / 152 million bushels.

Matif wheat price is tracking down again. More pressure has also been reported in cash Black Sea wheat markets. The bid side of the market remains light the offer side from farmers with residual length, and looking forward to the new crop harvest rapidly approaching, has cracked a little lower.

Black Sea region weather maps have taken a slightly drier turn into the extended runs, but forecasters are still looking for a fairly nicely spread inch across much of the winter wheat areas in Russia.

Northern Plains dryness in the US/southern Canada is starting to get some more talking again with a few early planting areas starting to flirt with spring wheat planting.  The ongoing drought there has remained a concern for markets but becoming more topical again as we move towards planting and outlooks remain dry.  Canola showing similar risks.

Australia

Aussie markets are seeing action, buyers chasing tonnes helping delivered wheat markets on the east coast rise A$2/t or so.

Execution and logistics remain the name of the game though, with domestic freight markets firming slightly further as farmer trucks start coming off the road in preparation for planting.  Specific sites continue to see some premiums for easier execution.

Sorghum coming off slightly in the north with a few weather delays to harvest but a spread out enough planting window that so far not much of the crop has been reported to have significant damage from the recent storms.  Some of the later planted areas may yet see more damage reported as it dries down enough to visit more fields.

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