Daily Market Wire 30 August 2019

Lachstock Consulting August 30, 2019
Wheat futures settled lower.
  • Chicago wheat December contract down 2.5 cents per bushel to 472.75c;
  • Kansas wheat December contract down 2.75c to 401.5c;
  • Minneapolis wheat December contract down 4c to 501.5c;
  • MATIF wheat December contract down €0.75 per tonne to €169;
  • Corn December contract up 0.25c to 371.25c;
  • Soybeans November contract up 2.75c to 868.5c;
  • Winnipeg canola November contract down C$0.40 at C$447.50;
  • MATIF rapeseed November contract up €0.25 at €380;
  • Brent crude October contract up $0.59 per barrel to $61.08
  • Dow Jones up 326.15 to 26362.25;
  • AUD weakened to US$0.6726
  • CAD strengthened to $1.3283
  • EUR weakened to $1.1056

In the wheat pits Chicago settled down -2.5 usc/bu closing at 472.75usc/bu, Kansas was -299.75 usc/bu lower to settle at 104.5usc/bu, while Minni softened -3.9 usc/bu to go out at 501.5usc/bu. Corn gained 0.25 usc/bu to go out at 371.25usc/bu while Beans were up 2.75 usc/bu to settle at 868.5usc/bu WCE Canola softened -0.4 CAD/mt closing at 447.5CAD/mt with Matif Canola finishing higher by 0.25 Eur/mt. In outside markets the Dow Jones fell 0 points, Crude was up 0.79 bbl the Aussie was -0.00093 lower to settle at 0.67266, the CAD softened -0.0018 while the EUR fell -0.0021

The narrow ranges continue in CME wheat. Last night saw a lower close but the trend of low volatility driven by high global inventories continues. For those of you interested in volatility, Chicago Dec 19 wheat is currently a little over 20% which implies a daily trading range of under 6usc/bu – the market is telling you there is nothing to see here… move along.
Black Sea origin wheat finally broke under $190/t as the weight of supply and seemingly pedestrian demand finally became too much to bear. At the same time however, the US export program finally reacted to the relative value. Export sales printed 661,700t for the week – almost double what is needed to hit the USDA target. Corn also found the sweet spot posting sales of 858,900t with Mexico the main buyer. This is definitely a silver lining in an otherwise dark cloud for US corn exports given how cheap and available South American corn is. In the bean pit the seasonal conditions will remain the main driver in price but any shift in US/China trade relations remains the elephant in the room. Interestingly, China has lagged their response to Trumps latest tariff increase and like a bad TV series people will jump to conclusions. Add to this a lack of clarity around the governments stance on the Renewable Fuel Standards and a yield that is far from determined and we have some more twists and turns still to come.
In Australia, showers going across the Wheat Belt in WA and forecast remains positive going into the weekend. Most of SA is on the dryer side according to the BOM’s September outlook. To date, these crops have held up but will need 15-20mm to potentially secure yield. Cold temps still push throughout Southern New South Wales adding more stress to the crop. Markets continue to firm a fraction on new crop across the board.


Source: Lachstock Consulting


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