Markets

Daily Market Wire 28 March 2019

Lachstock Consulting, March 28, 2019
US currency was stronger overnight, US beans and corn fell while wheat futures were mostly unchanged; Wednesday’s settlements as follows;
  • CBOT Wheat May contract was up 0.25c to 469.5
  • Kansas wheat May contract up 1.25c to 444.5c
  • Corn May contract down 3.5c to 373.75
  • Soybeans May contract down 13.25c to 887.5c
  • Winnipeg canola May contract was down C$0.30 to C$451.40
  • MATIF rapeseed May contract down €1.75/t to €358.25
  • Dow Jones down 32.14 points to 25,625.59
  • Crude oil May contract down $0.53 to 59.41
  • AUD down to 0.7080c,
  • CAD down to 1.34,
  • EUR down to 1.124.

Commentary on markets

A mostly quiet day in the grain markets, with the trade adjusting their positions ahead of this Friday’s reports – Chicago wheat closed up a quarter of a cent to 469.5¢, KC +1 1/4¢ to 444.5¢, Minny up half a cent to 567.75¢, and Matif down 1.5€ to 186.5. Corn dropped three and a half cents to 373 3/4¢, beans gave up 13 and a quarter cents to 887.5¢, and canola dropped 30¢ to $451.4 (matif -1.75€ to 358 1/4€). Crude oil continued to ease back, with WTI down 53¢ to $59.4/barrel and Brent off 14 cents to $67.8 while the DOW is trading nominally lower (down 32 points). The AUD has given up gains from the other day, back down to 70.8¢, while the EUR is weaker to $1.124 and the CAD at $1.34. Brexit is still in limbo – the prime minister offered today to resign after (and if) parliament will approve her exit plan – a move which has been seen as a bid to buy more votes as we rapidly approach the temporary extension deadline of April 12 (which will be extended to the 22 of May IF they can pass an exit plan by the 12th).
Meanwhile, we see nothing fundamentally new to the ongoing US/China trade war and there are questions about whether the “NAFTA 2.0” trade deal can pass with Democrats (in control of the House) opposed to it. Speaking of China, comments from Cofco the other day at a meeting in Switzerland have grabbed headlines as the company claims its intention to double their grain book there.
Market sentiment has been getting more bearish on beans into this Friday’s US acreage report (with ideas that rotations will switch less than “needed”) – average survey estimates are showing 86.2 million bean acres and 91.3 million corn acres. Lachstock makes note that this is not a final figure, and only reflects initial intentions as of late Feb/early March when the survey was conducted. Meanwhile, with harvest wrapping up in Central Brazil, crop estimates are slipping down slightly – estimates moving towards the 114 million-tonnes-type level.

US and Australia rain watch

Concerns are still ongoing over flooding across the western corn belt in the US – current weather models are showing 2-2.5″ of rain across nearly half of Missouri and central Illinois (and half an inch plus in wheat areas of western Kansas). With the repeated heavy rains concerns about prevented planting continue to build (as do worries about more extended interference in domestic logistics). Back locally, we’ve been watching rains move south through Queensland for the last two days, and should see them move more heavily into the broader Downs region on Friday night/Saturday. Forecasts models remain unchanged there, with figures still in the 20-30 mm type range (plus a few mm from the sprinkles recently).

Source: Lachstock Consulting

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