Markets

Daily Market Wire 4 July 2022

Lachstock Consulting, July 4, 2022

Most wheat markets fell about 4.5pc, other than the Black Sea which only lost 1.5pc. Soybeans dropped 4.5pc. Rapeseed weakened 3pc.

  • Chicago wheat September contract down US38 cents per bushel to 846c/bu;
  • Kansas wheat September contract down 38.25c/bu to 913.50c/bu;
  • Minneapolis wheat September contract down 42c/bu to 948c/bu;
  • MATIF wheat September contract down €15.75/t to €334.50/t;
  • Black Sea wheat September contract down $5.75/t to $370.50/t;
  • Corn September contract down 9c/bu to 619.75c/bu;
  • Soybeans November contract down 62.75c/bu to 1395.25c/bu;
  • Winnipeg canola November 2022 contract unchanged at $878.50/t;
  • MATIF rapeseed November 2022 contract down €21.75/t to €673/t;
  • ASX July 2022 wheat contract unchanged at A$418/t;
  • ASX Jan 2023 wheat contract down $12.30/t to $426.70/t;
  • AUD dollar weaker at US$0.682.

International

As has been the case through the entire conflict, for every bullish news article there is a bearish one following it up. Missiles striking near the port of Odeasa = bullish. Reports that Turkish President is jumping on a call with Vlad and Zelensky to nut out the export corridor = bearish. More chat around the amount of old crop Russian wheat that has been defaulted on = bullish. Russia’s new tax system should reduce the tax by as much as US$50/t = bearish. EU Wheat production has been dropped from 130 million tonnes (Mt) to 125Mt according to the EU commission = bullish. Ukrainian new crop being offered ex Romanian ports = bearish.

Funds continue to exit Ag commodities. Chicago wheat was 54usc/bu lower over the reporting period which led to the spec reducing their long position by 8,599 contracts. This subsequently puts them back into the middle of the range for this time of year. Given wheat is another 90usc/bu lower the spec would arguably be short now. While corn only dropped 1.25usc/bu over the reporting window, the spec shed 51,147 contracts, while soybeans cut 32,262 contracts. Both row crop contracts also suffered flat price losses, so it’s safe to assume they will see another week of unwinding when we get the data next Friday.

Japan is enduring one of its worst heat waves on record. Officials are urging people to keep their air-conditioners running to avoid heat stroke, though doing so could lead to potential power shortages. Japan’s aging population is especially vulnerable to heat stroke and exhaustion, and officials have attributed several deaths to the heat

An Argentine trucker strike ended on Thursday after some unions upset with diesel shortages and prices reached a deal to lift the one-week protest around the major port of Rosario. This is expected to help the flow of grains for export. Some protests, however, could continue since some smaller trucker groups were not involved in the deal. Autoconvocados Unidos, one of the trucker unions participating in the strike called the lifting of the strike an act of good will.

Australia

Local markets drifted lower to round the week out. Wheat markets were off $20-30/t by the end of the week on new and old crop in a fickle market where liquidity is thin. We saw moments of buying interest in Western Australia over the week and bits and pieces on the East Coast. Barley and canola markets were sideways with barley finishing a touch lower for the week and canola rebounded $10/t on Friday on new crop but still remains volatile internationally.

There was no improvement to grain port congestion this week with wait times at Kwinana and Newcastle still out at 31 and 29 days respectively. Albany improved slightly with wait time down to 17 days and Port Lincoln increased from 7 to 14 days. There are currently 34 vessels anchored at ports around Australia.

Heavy rainfall over the weekend in parts of Queensland and New South Wales will certainly bring the late winter plant to an end. Showers are forecast to continue until Thursday in parts of central and northern NSW.

 

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