Markets

Daily Market Wire 26 September 2019

Lachstock Consulting, September 26, 2019
Most futures settled lower though spring wheat continued to trade higher.
  • Chicago wheat December contract down 4.5 cents per bushel to 477.25c;
  • Kansas wheat December contract down 1c to 404c;
  • Minneapolis wheat December contract up 9.75c to 554.25;
  • MATIF wheat December contract up €0.50 to €170.75;
  • Corn December contract down 0.5c to 374.25c;
  • Soybeans November contract down 5c to 889.25c;
  • Winnipeg canola November contract down C$0.40 to $448.90;
  • MATIF rapeseed November contract down €0.5 to €385.75;
  • Brent crude December contract down $0.69 per barrel to $61.43;
  • Dow Jones index up 162.94 points to 26970.71 points;
  • AUD weakened to US$0.6756;
  • CAD weakened to $1.3259;
  • EUR weakened to $1.0953;

Markets and trade

In the wheat pits Chicago settled down -4.5 usc/bu closing at 477.25usc/bu, Kansas was -1 usc/bu lower to settle at 404usc/bu, while Minni rallied 9.75 usc/bu to go out at 554.25usc/bu. Corn fell -0.5 usc/bu to go out at 374.25usc/bu while Beans were down -5 usc/bu to settle at 889.25usc/bu WCE Canola softened -0.4 CAD/mt closing at 448.9CAD/mt with Matif Canola finishing lower by -0.5 Eur/mt.

In outside markets the Dow Jones was up 100 points, Crude was down -0.76 bbl the Aussie was -0.004968 lower to settle at 0.67492, the CAD rallied 0.0028 while the EUR fell -0.0078

A tale of two markets… or is that three? Minni keeps marching higher as the back end of Hard Red Spring harvest in both the US and Canada struggles with rain and snow. The fact the speculative trader was so short leading into this event has given the bounce a few more legs, taking Dec HRS futures from USD$4.87/bu to last nights close of USD$5.5425/bu.

At the same time the spread to HRW has rallied over 85usc/bu.

The global backdrop continues to throw up curved balls with the Russian ag minister increasing their crop from 75Mt to 78Mt while the Argentina Ag dept indicated their crop would be a record 21Mt – which, given recent rainfall seems laughable.

On the demand side Egypt bought 240,000t from Russia and 60,000t of French while the US and Japan nut out their trade deal.

Australia

Aussie production estimates are fast becoming a game of bingo – robust and well-constructed yield models get as much airplay as an outright guess – either of which could eventually be right.

With little to no rainfall on the short term forecast it was interesting to see ASX fall with some serious volume. After posting a high of $370 on the 12th of Sept, the market closed yesterday at $355. This is a clear reflection of tug of war between the domestic and international market at the moment – the function of the local market is to keep the grain onshore so it makes sense to trade at a premium – but what should that premium be?

Many balance sheets still have an exportable surplus on the east coast which is some margin from current values. Qld feed markets are pricing imports from WA which will be immune from these calculations but Vic and SA still have all the potential.

 

 

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