Markets

Daily Market Wire 29 September 2022

Lachstock Consulting, September 29, 2022

US wheat gained 3pc. Macros saw the Dow Jones Industrials Average lift following a 6-day easing, and the US dollar index ease following a 6-day gain.

  • Chicago wheat December contract up US31.75 cents per bushel to 903.25c/bu;
  • Kansas wheat December contract up 32.75c/bu to 976c/bu;
  • Minneapolis wheat December contract up 29.25c/bu to 972.5c/bu;
  • MATIF wheat December contract up €5.25/t to €353.75/t;
  • Black Sea wheat December contract up $2.75/t to $327.25/t;
  • Corn December contract up 3c/bu to 670.5/bu;
  • Soybeans November contract up 0.75c/bu to 1408.75c/bu;
  • Winnipeg canola Nov 2022 contract up C$9.40/t to $838.50/t;
  • MATIF rapeseed November 2022 contract up €4.50/t to €607.25/t;
  • ASX Jan 2023 wheat contract up A$1.50/t to $437.50/t;
  • ASX Jan 2023 barley contract up $9/t to $325/t;
  • AUD dollar firmer at US$0.652.

International

Confirmation. The much-anticipated pushback on the grain corridor finally hit the wires with Russian President Putin blaming the west for being greedy while Ukrainian President Zelensky indicated the corridor may be in jeopardy. Additionally, there was also the massive rumour that Russia was considering nationalising its grain industry. A Russian single desk. Lots of questions but the market viewed this as an ultimate restriction of supply. 

The US currency had a technical rejection of the bull rally – every ship that ever sunk had a chart room so take that with a grain of salt but the fact the Bank of England indicated it would buy back a bunch of bonds gave the global equity markets a boost. 

With Russian exports lagging and a genuine threat to Ukraine’s export path the rest of the world must do some heavy lifting. Dec-Feb is the Argentine wheat selling season and, historically at least, they like to go hard. However, the lack of rainfall across the wheat growing areas has taken the sting out of their tail. Australia is suffering under quality uncertainty given the excessive rainfall which has kept both the bid and the offer quiet. 

China has been quiet – particularly in corn. Export sales are not expected to hit the 906,000t weekly pace needed to hit the USDA target. The impacts of a zero Covid policy have been blamed but it is interesting to note that domestic hog futures price has nearly doubled since making the March lows. 

Energy allocation is a major issue in Europe with many countries cutting up to 20pc of supply. This is reducing crush capacity in some plants which, given the lack of Ukrainian crush, is tempering any sustained seed rallies. 

Australia

Local markets gained more strength yesterday with both new and current crop values stronger over the course of the day. Wheat values were up $5-6/t through grower bids, quality wheat bids are running harder than feed wheat still, given the uncertainty around weather and up and coming harvest. It will be be same old story for the next month it feels. 

Viterra held its remainder export capacity auction this week, and reported records were broken. Across the 6 ports in South Australia 18 exporters have forward booked 7 million tonnes of shipping capacity for the 22/23 season.

Average wait times for vessel loading improved at Geraldton, to 6 days, Kwinana, 17 and Port Kembla, 17 from (19, 25 and 29 days) respectively. Wait times increased for Albany from 16 to 18 days and Brisbane 4 to 10 days. There were 18 vessels anchored down from 22 last week and 10 loading. 

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