Markets

Daily Market Wire 3 April 2020

Lachstock Consulting, April 3, 2020

EU rapeseed was up 1pc, crude oil up 21pc, other markets were lower.

  • Chicago wheat May contract down US8.5¢/bu to 541.75¢;
  • Kansas wheat May contract down 11c to 464¢;
  • Minneapolis wheat May contract down 5.5c to 519¢;
  • MATIF wheat May contract down €2.75/t to €190.75/t;
  • Corn May contract down 1.25c/bu to 333.5¢;
  • Soybeans May contract down 4¢/bu to 858.75¢;
  • Winnipeg canola May contract down $C1.60 to $463.50/t;
  • MATIF rapeseed May contract up €4 to €361.75/t;
  • Brent crude June contract up US$5.20 per barrel to $29.94;
  • Dow Jones index up 469 points to 21413;
  • AUD weaker at $0.6060:
  • CAD firmer at $1.415;
  • EUR weaker at $1.1086

Market news

Wheat continued the sell off through the day session in the US, not helped by mediocre export sales figures.

Chicago ended down 8.5¢ to 541 3/4¢, KC -11¢ to 464¢, Minny -5.5¢ to 519¢, and Matif -2.75€ to 190.75€.  Corn closed off a cent and a quarter to 333.5¢ and beans were down four to 858 3/4¢ (Winnipeg dropped a buck sixty to $463.5, Matif +4€ to 361.75€).

The DOW closed up 470 points despite massive US unemployment figures, with more talk of the potential for further stimulus.  The AUD is trading around 60.6¢, the CAD $1.415, and the EUR $1.086.

US wheat export sales were only 73,000t for the old season and 186,000t for the new, though beans, which included two Chinese boats, and corn were both better at 958,000t and 1.075Mt respectively.  Customs figures were also out and ethanol markets saw at least a little optimism from larger DDG figures which were up about 25pc year-on-year.  Customs data also showed very large pork and beef export figures.  Cattle futures continued to collapse. Both contracts were limit down again, including the expanded feeder limits. With April futures moving into delivery there are no suggestions that there will be any [delivered] after the sell off.

Globally, Russia has formally approved April, May and June grain export limits at 7 million tonnes. Markets appeared unconcerned because new season supply is rapidly approaching.  There’s a similar, albeit reversed, push going on in Brazil to cut non-Mercosur export taxes and allow in Russian wheat with mills there worried about supply disruptions in the coronavirus situation. No tax changes have yet been reported.

Egypt is also in the news, with new plans to increase commodity reserves. Wheat is the obvious commodity they would choose to increase, but how they’d fund and implement it is open to question.

New season weather remains on the trade’s radar with a little more rain coming for parts of Russia but general concerns building about the dryness in central winter wheat areas.  Europe is looking at some warmer and drier weather in the short term though, which will help conditions there.

CBOT markets will be closed after the day session on next Thursday and reopen for the night session on Sunday.

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Australia

Quiet markets here, with more discussion ongoing about the global situation than the local one.  WA’s border closure is not expected to impact grain movements because they are deemed essential, but the uncertainty around the virus remains a massive red flag for markets.  Weather forecasts still look solid for the east coast, and some slight improvements for parts of SA. Much of the country is looking towards a cracker start to the season.

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