Markets

Daily Market Wire 26 March 2019

Lachstock Consulting, March 26, 2019

Futures mostly traded firmer; Monday’s settlements as follows;

  • CBOT Wheat May contract was up 3.5c to 469.5
  • Kansas wheat May contract up 4.25c to 449.25c
  • Corn May contract up 1.5c to 379.75
  • Soybeans May contract up 2.75c to 906.5c
  • Winnipeg canola May contract was up C$2.80 to C$456.70
  • MATIF rapeseed May contract up €1.25/t to €359
  • Dow Jones up 14.51 points to 25,516.83
  • Crude oil May contract down $0.22 to 58.82
  • AUD up to 0.7110c,
  • CAD up to 1.341,
  • EUR up to 1.132.

Commentary on markets

Wheat picked up gradually through last night’s session in the US, before easing back slightly on some profit taking pre-close.  Chicago wheat closed up 3.5¢ to 469 ½, KC up 4 ¼¢ to 449 ¼¢, Minny up 1 cent to 573 ¼¢, and Matif rapeseed is unchanged at 189.5€ on the earlier close.  Corn closed up a cent and a half to 378 ¼¢, Beans +2 ¾¢ to 906.5¢, and canola bounced slightly after Friday’s sell off with Winnipeg up $2.8 to 456.7 and Matif up 1 ¼€ to 359€.  Crude oil broke early on but bounced quickly to trade nearly unchanged (closing -11¢ to $58.8 on WTI, up 18¢ to $67.2 on Brent) and the DOW traded a tight band – up slightly early session but off 33 points as of writing.  The AUD has continued to strengthen slightly (to 71.1¢ currently, the EUR up a hair to $1.132, and the CAD continuing to weaken slightly to $1.341.  Brexit politics are being thrown all over, with the Prime Minister acknowledging that they do not have enough votes to pass the proposed Brexit agreement (which they need to pass to meet the EU’s requirements to avoid an earlier no-deal exit).

Saudi barley deals done

SAGO results were out (for barley) late last night – most booked prices ranged in the $205-$215 C&F range (with the 2h June positions the cheaper ones – potentially someone looking to roll those to new crop).  Working back, that’s the equivalent of approximately a $235-240 AUD FIS market in WA – some $40 under current levels and confirming expectations that this will be filled mostly with EU/BSEA and potentially a few Argy boats (optional tender – so these can change before shipment).

Egypt wheat buying enquiry renewed

Looking forward, GASC is reportedly back in for late April/early May wheat arrival.  This tender reverts to prior payment terms though (after they changed to at-sight payment earlier this year) as they appear to have used up their prior credit line – should add a few dollars in extra costings above the market (part of the traditional “GASC Premium”).

US mid-west messy planting prospects

Concerns are starting to pick up in the US Midwest about the rains Lachstock mentioned yesterday, as forecasters consider the impact of the added moisture on already flood-level waters in the southern Midwest.  From a wheat point of view, we note that the Red River is not supposed to start fully flooding until next week or the week after (weather dependent) – it’s still ice covered in parts and temperatures there have not warmed up as quickly as they have elsewhere.  Still, this makes for a messy planting season further north of Grand Forks where there are still significant spring wheat areas.  Winter wheat crop conditions should be out later this morning for the southern plains of the US – some drier conditions on the near term forecasts for wheat areas but very good soil moisture has held through recent weeks.

Australia starts paddock work

Planting 2019 is starting to kick off on the east coast, with fertiliser going down after the rains in preparation to start planting (and reportedly some have already hit the fields).  We’re still watching the later week rainfall forecast, with outlooks improving some for the Queensland’s Darling Downs region (particularly further west where there had been little to no moisture in earlier runs) but still limited into central and southern NSW.  Fingers crossed that the system spreads a bit further south.

Source: Lachstock Consulting

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