Markets

Daily Market Wire 27 June 2022

Lachstock Consulting, June 27, 2022

Friday’s wheat markets continued about 1pc lower. Canola/rapeseed gained 3-5pc following a week of losing around one-fifth of its value. Other gains included the Dow and Brent crude both around 2pc and soybean meal and soybean oil around 1pc.

  • Chicago wheat September contract down US12.75 cents per bushel to 936.5c/bu;
  • Kansas wheat September contract down 12.5c/bu to 998.25c/bu;
  • Minneapolis wheat September contract down 9.25c/bu to 1070.5c/bu;
  • MATIF wheat September contract down €1.75/t to €357.25/t;
  • Black Sea wheat September contract down $1.50/t to $380.50/t;
  • Corn September contract up 16c/bu to 682.75c/bu;
  • Soybeans September contract up 8.75c/bu to 1445.75c/bu;
  • Winnipeg canola November 2022 contract up C$25.50/t to $870.20/t;
  • MATIF rapeseed November 2022 contract up €34.25/t to €691.75/t;
  • ASX July 2022 wheat contract down A$1/t to 428/t;
  • ASX Jan 2023 wheat contract down $5/t to $443/t;
  • AUD dollar firmer at US$0.692.

International

What a week it was. Chicago Dec-22 wheat contract price dropped US$1.50/bu over the week with the world happy to focus on a massive Russian crop and little else. Never mind that SRW wheat is the cheapest wheat in the world, highlighted by a massive export sales week of 477,800t, well above estimates of 275,000t. The French wheat crop had its eighth week of lower estimates, the crop condition down another 1pc to 64pc good to excellent rating.

Weather is a mixed bag but models are aligned, suggesting the dryness in the central and southern US Midwest is expected to increase. Southern Illinois has only had 18pc of normal rainfall for June, southern Indiana is running around 22pc while southern Iowa is around 50pc of normal.

While the CFTC reporting window missed a bunch of the market move, because it publishes at the end of the week the contacts as at the previous Tuesday, it did show more in the way of position squaring by the funds. Chicago wheat dropped 2647 contracts over the 75c down move which is actually pretty light. Corn lost 17,893 contracts (managed money and other reportables) but is still near record long for this time of year. A similar story in soybeans which lost 12,230 contracts for week ending Tuesday 21 June.

Russia targeted the Ukrainian capital of Kyiv over the weekend with a number of missile attacks. The G7 gathered in Germany on Sunday as part of their annual summit. The key city of Severodonetsk is now completely under Russian control according to Ukraine officials

China launched its latest massive aircraft carrier last week – interestingly named the Fujian which is the province closest to Taiwan.

Australia

The local market rounded out the week sluggish and remained all offer-side. Grower bids on the boards were yet another $5-10/t lower on wheat, while canola continued lower as new season grower bids dropped and local site depot numbers were back to $780-800/t levels east coast.

Australia had a dry weekend for nearly all winter cropping regions, with another dry week forecast for this week. The forecast has rain building from Friday onward with most of Queensland and NSW set to receive varying totals with the heavier falls expected in CQ and south east Qld and north east NSW. Most of central and northern NSW is forecast to receive 5-15mm which will likely mean winter crops that don’t get in by the end of this week may not go in.

Port congestion has blown out again this week with wait times at Kwinana and Newcastle now at 30 and 31 days respectively, with delays also increasing at most other major ports.

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