Markets

Daily Market Wire 27 April 2020

Lachstock Consulting, April 27, 2020

Friday’s markets settled lower.

  • Chicago wheat July contract down US14.25¢/bu to 530.5¢;
  • Kansas wheat July contract down 10c to 483.25¢;
  • Minneapolis wheat July contract down 6.5c to 513.25¢;
  • MATIF wheat September contract down €1.25 /t to €190;
  • Corn July contract down 3c/bu to 323¢;
  • Soybeans July contract down 7.25¢/bu to 839.25¢;
  • Winnipeg canola July contract down $C2.40 to $459.30/t;
  • MATIF rapeseed August contract down €2/t to €364.50;
  • Brent crude June contract up US$0.11 per barrel to $21.44
  • Dow Jones index up 260 points to 23775;
  • AUD firmer at $0.6396;
  • CAD weaker at $1.4109;
  • EUR firmer at $1.0818.

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Markets

Wheat felt the axe towards the end of the session on Friday in the US. Chicago July contract off 14 1/4¢ to 530.5¢, KC July was down a dime to 483 /4¢, Minny July contract was -6.5¢ to 513 1/4¢, and Matif September wheat contract was a euro and a quarter lower to 190€. Row crops dropped slightly with July corn down three cents to 323¢ and July beans -7 1/4¢ to 839.5¢ (Matif August  -1.5€, Winnipeg July contract -$1).  Crude has settled into a less volatile trading range, with WTI around $16.5 premarket/ Brent $21.6 and the DOW was up 260 points on the close Friday.  The AUD’s around 63.9¢, the CAD $1.411, and the EUR $1.082.

Lower wheat futures saw some profit taking in the mix, but we’re also watching much improved EU weather maps with widespread outlooks for an inch across northern EU countries.  More moisture’s also on the maps for the southern Great Plains of the US later this week, which should help fill in on some of the drier areas near the panhandle.  There are reports that frost damage is continuing to affect emerging crops and some are expecting this  week’s crop condition reports to worsen. But right now market sentiment has anticipated better crop outcomes. Black Sea region weather maps are also slightly better, but parts of the Volga region are likely to miss out.

The Russian grain export quota looks to have been reached over the weekend, with the Ag Ministry announcing that, by their count, all 7 million tonnes allowed have been declared.  Although we may see some excitement in the headline crowd, the cash market has been expecting this for a while and exports will continue loading through coming weeks, making good on early export declarations.

Kazakhstan has revised, upward, their export quota for the next month.

US export sales flashes had another two Chinese bean boats sold (19/20 season), 125,000t soybeans (mixed seasons) to Mexico, and nearly 600,000t of corn of multiple seasons. These numbers are still a drop in the bucket compared to demand destruction on ethanol. Another more than 100 million bushels corn demand was cut over the weekend as more biofuel capacity was taken offline.

Gasoline demand remains weak, diesel futures just hit new lows and ethanol margins remain down in the dumps.

With the weaker corn prices, the EU looks set to announce a new corn levy sometime this week. Corn import parity has been below the threshold price for six days now and a higher EU import levy would appear imminent.

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Australia

Aussie markets are just starting back up this week. Western Australia has a public holiday. Weather runs have continued to fill in this rain event for NSW and northern Victoria with solid chances of over an inch for most.  That follows timely weekend rains across the SA and Victorian Mallee and part of the Wimmera.  Field work is going in full swing with many trying to get acres in before the rain.

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