Markets

Daily Market Wire 28 February 2019

Lachstock Consulting, February 28, 2019

Beans closed out unchanged after some rapid intraday volatility during the Lighthizer trade comments to the US congress

  • CBOT Wheat was up 0.75c to 461c
  • Kansas wheat up 3c to 438.75c
  • Corn down 2c to 363.75c
  • Soybeans down 0.25c to 903.5
  • Winnipeg canola down C$1.90 to $465.70
  • MATIF canola up €2/t to €359.25
  • Dow Jones down 72.82 to 25,985.16
  • Crude oil up $1.44 to 56.94
  • AUD down to 0.714c,
  • CAD up to 1.314c,
  • EUR down to 1.137c.

Political issues and trade

Politics have been heating up in Pakistan the last few days, with overnight events including cross border air-raids and a shot-down Indian fighter jet.  Global politicians have called on both sides to stop the violence, but so far no progress appears to have been made –  hopefully for all parties involved that can change.  US Trade Representative Robert Lighthizer told the US congress today that the deal currently being negotiated with China includes a range of enforcement processes designed to ensure Chinese compliance (this has been an apparent sticking point in recent months given US concerns that Beijing would fail to follow through) – and also confirmed that the US will formally cancel the planned March 1st tariff hikes given ongoing negotiations.

Wheat

Cold weather is back on the radar once again for parts for the US prairies next week – though so far winter kill concerns have been limited despite the cold weather.   Meanwhile, Black Sea conditions remain supportive with warmer weather reducing snow cover but no cold snaps to bring concerns.  Russia was back in the news with reports confirming that they will not be officially restricting exports, but at this point the cash price spreads are already rationing back demand on the old crop.  US wheat has apparently also been garnering some more residual old crop demand (at these prices it should) – but many are still concerned it is “too little, too late” with the inverse looming.  We’re going into first notice day on March US wheat futures, so the markets will be watching deliveries after the recent spike in H/K (futures contract month March/May) spreads.

Soybeans

Down in South America, later bean crops continue to benefit in Brazil and Argentina with some moisture on the radar.  Harvest is continuing to pressure cash markets there, with additional broader concerns that if the US and China reach a deal the large US bean stocks will be back in the market and competition once again for Chinese demand.

Australia

Back locally, the BOM will be out with their updated outlook today – hopefully with some improvements to moisture potentials.  Trade discussion is focusing more and more on where we will see new crop acres planted (or not planted as it may be).  The last few days have seen some sharply discounted bids in the market as buyers hope to cash in on the recent sell off and concerned sellers, but offers have been slow to follow down and volume has been limited..

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