Markets

Daily Market Wire 3 December 2019

Guest Author, December 3, 2019

Oilseeds firm and US wheat closes lower.

  • Chicago wheat December contract cents down 4.2 cents per bushel to 543.2c;
  • Kansas wheat December contract down 7.6c/bu to 439.2c;
  • Minneapolis wheat December contract down 5c/bu to 489.4c;
  • MATIF wheat December contract up €0.75 per tonne to €186.25/t;
  • Corn December contract up 2.2c/bu to 373.4c;
  • Soybeans January contract down 6.2c/bu to 870.4c;
  • Winnipeg canola January contract down C$4.50/t to $452.10/t;
  • MATIF rapeseed February contract down €1.50/t to €388.25/t;
  • West Texas crude January contract up US$0.57 to $55.99 per barrel;
  • Dow Jones index points; DOW dropped 268 points to 27,783 points;
  • AUD stronger at $0.6818;
  • CAD stronger at $0.75132;
  • EUR stronger at $1.10785.

Tariff impact

Macro markets were thrown for yet another lurch when US President Trump announced a new set of steel tariffs.  This time they will be imposed on Argentina and Brazil, which are being for weakness in their own currency values amid ongoing political and economic problem.

Global grain

Updated crop progress figures from the USDA continue to show row-crop harvest plugging along, even amid the weekend winter storms, with the corn harvest estimated to be up 5 per cent to 89pc complete, and beans up 2pc to 96pc.  Updated US export inspections were also out, with corn and wheat shipments lower than average ideas 429,000t and 247,000t, including one durum boat, respectively and beans mostly as expected at 1.5 million tonnes (Mt), almost exclusively on recent business to China.

Two Panamaxes of sorghum were shipped to China.  This was already expected from prior export sales figures, but suggested some pressing near-term demand, or desire to avoid political risks, given the rapid loading.

Global markets have had a slow start to the week on grains, but Egypt’s GASC is back in the market once again looking for last-half January wheat.  Black Sea markets have continued to firm in recent weeks as we approach year’s end, and this will coincide with the Orthodox Christmas window for loading. Lachstock expects to see some solid competition from French wheat in this tender.

Australia

In its latest quarterly crop report released overnight, ABARES has called the Australian wheat crop at 15.9Mt, in line with Lachstock’s estimate last week, with barley at 8.7Mt, or 500,000t above the standing Lachstock estimate, and canola at 2.1Mt in line with the Lachstock figure. ABARES has penciled a new-season sorghum estimate of 398,000t from the smallest area and yield on record if dry conditions prevail.  Local markets continued to march higher yesterday to kick off the week. Bids to wheat growers were up $5-$6/t in WA, and this gap in harvest through Victoria with cold and showery conditions is supporting the market for nearby demand. Canola bids also moved a fraction higher throughout the day, and if conditions start to fine up, harvest of western Victoria crops will start later next week.

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