Markets

Daily Market Wire 29 January 2020

Lachstock Consulting, January 29, 2020

US corn firmer; wheat and soybeans were weaker.

  • Chicago wheat March contract down 2.5 cents per bushel to 569.75c;
  • Kansas wheat March contract down 4.5c to 482c;
  • Minneapolis wheat March contract down 5c to 542.25c;
  • MATIF wheat March contract up €0.25 per tonne to €194.5/t;
  • Corn March contract up 6c to 386.5c;
  • Soybeans March contract down 2.25c to 895c;
  • Winnipeg canola March contract up C$0.30/t to $461.80/t;
  • MATIF rapeseed February contract up €1/t to €404.50/t;
  • Brent crude March contract up US$0.30c per barrel to $59.50;
  • Dow Jones index up 187 points to 28,723;
  • AUD unchanged at $0.676;
  • CAD at $1.316;
  • EUR unchanged at $1.102.

Worlds markets

After stabilising slightly yesterday, wheat gave up overnight with the absence of any new buying demand to close down two and a half cents on Chicago (to 569 3/4¢), -4.5¢ to 482¢ on KC, -5¢ to 542 1/4¢ on Minny, although Matif did end up a quarter euro to 194.5€ on the earlier close.  Corn picked up six cents to 386.5¢ while beans dropped two and a quarter to 895¢ (Winnipeg canola +30¢ to $461.8, Matif +1€ to 404.5€).  Macros were slightly more optimistic, with crude up about thirty cents to $53.8 WTI / $59.5 Brent and the Dow picking up 187 points.  The AUD’s steady in the 67.6¢ range, the CAD $1.316, and the EUR $1.102.  Macro concerns about coronavirus remain, but some realism about the impacts has started to trickle back in.

Corn did see support from another flash (two boats-worth to Mexico, after the Japanese sales yesterday), and there’s some optimism about demand support given South American weather problems.  However, recent private estimates have not yet cut the crop there any further and most of the safrinha crop has yet to be planted in Brazil.

Talk about wheat sales to China has continued, with focus on the possibility that the reported business was executed to make full use of tariff reduction quotas (TRQs) held by the counterparties, part of the US/China agreement included clauses intended to stop the government restricting TRQ use as they have in the past.

More comments out of India are also looking optimistic on the wheat crop there as domestic prices drop.  India’s wheat acreage was reported up sharply vs last year and talk of a crop near 110 million tonnes.

 

Australia

Australia’s sorghum plantings are still in focus with the highly variable rain coverage cutting back intentions somewhat; some paddocks are good to go on one end and still near bone dry on the other.

Radar maps are still looking great into this weekend though, with chances of another 30+ mm across the Downs (and 20+ into CQ where they’ve got more time yet to plant).

Lachstock also notes that there has been some more wheat traded in the last few days in SA and that prices were at levels suitable to meet reported prices on COFCO business to China.

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