Wheat markets settled lower 1-2 per cent.
- Chicago wheat July contract down US7.25c per bushel to 508.75c;
- Kansas wheat July contract down 10c to 444.5c;
- Minneapolis wheat July contract down 5c to 513c;
- MATIF wheat September contract down €1.75 to €188.25/t;
- Corn July contract up 0.25c/bu to 318¢;
- Soybeans July contract down 1.75¢/bu to 833.25¢;
- Winnipeg canola July contract down $C3.70 to $463.50/t;
- MATIF rapeseed August contract up €1/t to €375.50/t;
- Brent crude July contract down US$0.93 per barrel to $35.13;
- Dow Jones index down 9 points to 24465;
- AUD unchanged at $0.6541;
- CAD firmer at $1.3989;
- EUR weaker at $1.0904.
In the wheat pits Chicago settled down -7.25 usc/bu closing at 508.75usc/bu, Kansas was -10 usc/bu lower to settle at 444.5usc/bu, while Minni softened -5 usc/bu to go out at 413usc/bu. Corn gained 0.25 usc/bu to go out at 318usc/bu while Beans were down -1.75 usc/bu to settle at 833.25usc/bu WCE Canola softened -3.7 CAD/mt closing at 463.5CAD/mt with Matif Canola finishing higher by 1 Eur/mt. In outside markets the Dow Jones fell -8.96 points, Crude was down -0.67 bbl the Aussie was -0.0029 points lower to settle at 0.65353, the CAD rallied 0.0044 while the EUR fell -0.0053.
Rain on the plains…forces the market lower. Both the US HRW belt and Southern Russia received some much needed rainfall on Friday which flushed out the seller prior to the Memorial Day long weekend. The early poor reports from the virtual wheat tour have largely been forgotten with the market focusing on rainfall and potential for a late yield kick. The tour pegged the Kansas wheat crop at 284 million bushels (Mbu) vs USDAs best guess of 306Mbu. Harvest is well and truly underway in Texas and will kick off in southern Oklahoma this week. The French wheat crop bucked the recent trend posting a small improvement of 2pc to 57pc while rains have been slightly underwhelming.
There was a definite concern leading into the weekend that US/China relations could possibly take another leg lower. President Trump was back to finger pointing via twitter, the impact felt across a number of commodity markets as speculation around implied Chinese demand continues to develop. With China pushing to increase security laws, local protesters moved to the streets in an act of defiance. If successful, the new law would given Chinese national security agency’s unprecedented access to Hong Kong and would be clearly concerning to financial markets with the Hang Seng falling 5pc on Friday, the single biggest fall since 2015. It’s hard to see this not becoming a major issue in the development of a longer term US/Chinese relationship with US Secretary of State, Mike Pompeo condemning the proposed laws indicating it would be the death knell for Hong Kong’s autonomy.
COVID is shifting gears in Brazil as reflected in the US implementing a travel ban to Brazil. The mortality rate in Brazil’s indigenous people is double that of the rest of the country which, given the case growth, is extremely alarming. The US Memorial Day long weekend essentially kicks off summer this year saw Americans pushing the boundaries on state restrictions over social distancing. It typically sees huge numbers flock to beaches and lakes so it wasn’t a surprise to see reports of a spike in cases attributed to close contact gatherings. More than 1.6m Americans have been infected and over 97,000 have died, according to Johns Hopkins University.
Leading into the weekend we were all watching the front roll into Western Australia. This is significant given the reality that conditions were certainly on the dry side and growers were looking for another rain to top the profile up. It didn’t disappoint with the majority of the state’s cropping belt receiving 10-15mm, much needed drink and in time! Other states also continued to see scattered showers over the weekend pushing weekly rainfall totals up. Markets continued to tick along towards the end of the week, with old crop wheat and barley trading small parcels across the country where is needed. New crop wheat was steady, finishing the week a fraction firmer on some fronts, barley found a level and canola finished up relatively flat for the week. There are 5 barley vessels currently on the water heading to China and by the looks of it all they are still set for the destination with 3-4 to arrive in the next couple of days.