Markets

Daily Market Wire 28 October 2024

Lachstock Consulting October 28, 2024

 

Wheat markets eased more than 2 percent.

  • Chicago December 2024 wheat down US12.5c/bu to 569c/bu;
  • Kansas Dec 2024 wheat down 15c/bu to 572c/bu;
  • Minneapolis Dec 2024 wheat down 12.75c/bu to 605.25c/bu;
  • MATIF wheat Dec 2024 down €4.75/t to €216.75/t;
  • Corn Dec 2024 down 6.25c/bu to 415.25c/bu;
  • Soybeans Nov 2024 down 8.5c/bu to 987.75c/bu;
  • Winnipeg canola Nov 2024 up C$2.80/t to $641.40/t;
  • MATIF rapeseed Nov 2024 down €0.75/t to €507.75/t;
  • ASX Jan 2025 wheat down A$0.50/t to $326.50/t;
  • ASX Jan 2025 barley down A$3.50/t to $281.50/t;
  • AUD dollar down 36 points to US$0.6604.

The day ahead

Weather – The eastern side of the winter wheat belt in the US is set to get some much-needed rainfall. Some more rainfall in the main parts of Russia but not the dumping they need. France set to have a dry week which should help planting, Spain is about to get belted with over 4 inches forecast – they are in the middle of their corn harvest.

Markets – It was all about the veg oil complex last week with Winnipeg canola catching up some ground to Matif and palmoil making fresh 2-year highs. Decision time for Chicago wheat with a close below the 50-day moving average and some rain on the way. However, with over 500kt sold last week you can argue that US wheat is cheap enough. Russian wheat is still the key, and it went home feeling soft.

Australian day ahead – This week should see harvest kick into gear in earnest. Mixed reports of frost affected canola but better yield does little for direction. The GIAV crop tour was on the high side of estimates which should keep numbers on the defensive. The weakness in Russian wheat is being offset by a heavy AUD, so export parity for wheat should be largely unchanged. Next support for the AUD is 0.6575.

International

French wheat planting is pegged at 21pc complete vs the 5-year average of 47pc. Barley is 38pc in the ground vs avg of 64pc. Corn is 25pc harvested vs the avg of 69pc. Last season’s winter crop in France was belted by excessive rainfall and this year is off to a similar start. The next two weeks look clear for the majority of France and Germany, but the Spanish corn crop would be mid harvest with plenty of rain on the way.

Recent rainfall across Argentina’s main farming regions is expected to persist into November, supporting the timely planting of soybeans and corn, a top meteorologist told Reuters on Thursday. This forecast of continued rainfall comes after significant precipitation in recent weeks, which ended a prior dry spell in this key agricultural area that produces much of Argentina’s grain supply. 

Egypt is facing challenges in completing a significant Russian wheat purchase initially scheduled for loading this month, raising questions about the transaction between two major players in the global market. As one of the world’s largest wheat importers, Egypt announced last month a purchase of 430kt from Russia, with plans to load in October and deliver by the first week of November, according to the state buyer. However, the deal has yet to progress, with only days left before the wheat should be loaded, according to sources familiar with the situation. Ships for transporting the grain have not been assigned, and necessary paperwork is incomplete, they said. The cause of the delay remains unclear, and Egypt’s grain-buying agency, GASC, has declined to comment. Russia’s grain exporters’ union mentioned on 18 September there had been disagreements about whom Russian sellers should work with in Egypt.  

The Fed’s rate decision is maybe not as clear as it has been. While a 25-basis-point cut at the upcoming November meeting remains possible, continued economic strength suggests the Fed may not need to rush rates back to neutral. Next week will bring a wave of macroeconomic data: Q3 GDP is expected to grow at 3pc on a quarter-over-quarter, seasonally adjusted annual rate basis. Nonfarm payrolls are projected to show a gain of 120,000 jobs in October, down from 254,000, with the unemployment rate likely steady at 4.1pc.  

In a recent FX outlook presentation, MacBank suggested that a Trump victory would be bearish for the AUDUSD and the risk 3-4 times greater under Trump vs Harris.

Australia

Canola bids ended a positive week largely unchanged with conventional bids around A$825 and GM $775. Wheat was unchanged being bid $370 and barley $318 FIS in most port zones.  

In the east of Australia canola bids were up to end the week, conventional canola was bid $791 and GM $740, wheat was bid $350 with barley $300. 

The GIAV crop tour estimates Vic wheat yield at 2.2t/ha which would give Vic a 3.4Mt production (LSC 3.3Mt), Barley was pegged at 3.05t/ha yield with a total crop of 2.579Mt (LSC 2.12Mt).

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