Markets

Daily Market Wire 28 February 2020

Lachstock Consulting, February 28, 2020

Grains futures lower, oilseeds mixed.

  • Chicago wheat May contract down 8.25¢/bu to 527.5¢;
  • Kansas wheat May contract down 7.5¢/bu to 451.75¢;
  • Minneapolis wheat May contract down 6¢ to 524¢;
  • MATIF wheat May contract down €2/t to €187/t;
  • Corn May contract down 6.5¢/bu to 368¢;
  • Soybeans May contract up 3¢/bu to 895¢;
  • Winnipeg canola May contract up C$0.20/t C$456.60/t;
  • MATIF rapeseed May contract down €4.75/t to €387.25/t;
  • Brent crude May contract down US$0.60 per barrel to $52.20;
  • Dow Jones index down 1190 points to 25768;
  • AUD stronger at $0.6580;
  • CAD weaker at $1.338;
  • EUR firmer at $1.099.

Market news

The sell-off resumed overnight in the US with coronavirus continuing to bring widespread concerns across the board.  Chicago dropped back another 8 1/4¢ to 527.5¢, KC -7.5¢ to 451 3/4¢, Minny -6¢ to 524¢, and Matif -2€ to 187€ on the earlier close.  Corn lost six and a half cents to 368¢ though beans picked up 3¢ to 895¢ (Matif lost 4 3/4€ to 387.25€, Winnipeg up twenty cents to $456.6).  Crude’s fall has continued, with WTI dropping to $46.5/Brent $52.2 (off another 80¢ going into today’s sessions) and the DOW gave up another 1190 points as stocks free fell.  The AUD’s slightly stronger to 65.8¢, the CAD $.338, and the EUR $1.099.

(N.B. With first notice day coming, we’ve rolled to May futures here)

Coronavirus continues to show increased case numbers globally and there’s now a relatively universal consensus that “pandemic” is a realistic scenario – containment out the window with the inability to even identify sources for many of the new cases.

In a reflection of these concerns – Saudi Arabia announced some restrictions on travel for pilgrims to Mecca.

More travel restrictions are also going into place on a private level – interesting comments coming through about Cargill restricting all international travel, with some exceptions.

With modern tech most business can be conducted electronically, but it’s still a significant interference in operations where in-person meetings and negotiations are a significant factor.

Corporate earnings are also starting to be impacted directly. A corporate US poultry producer commented the other day about demand destruction and logistical problems likely to significantly hurt their next earnings.

Export sales were slightly disappointing on wheat at 382,000t versus hopes of towards 500,000t and beans very low at 339,000t, with almost no new Chinese business.  Corn was more reasonable at 865,000t and sorghum was 445,000t. When was the last time we saw more sorghum sales than beans?  A long time!  The Chinese business there from the other week did come through, with 2 boats directly declared and 324,000t of unknown, very likely to be Chinese.

Otherwise, it was relatively quiet for ag news – the IGC came out with new forecasts pegging wheat at record 769 Mt, but nothing new to the markets.

 

Australia

Aussie markets remain relatively steady so far to end the week, though southern NSW markets are slightly weaker with the increased rain forecast there next week. Vic markets have been a little more steady.

Current rain forecast models are showing 25-30+ mm across almost all of southern and central NSW – and 15-30mm across the Vic side of the Riverina and slightly less into the Wimmera.  Continuing to set a great base for the coming year.

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