Daily Market Wire 4 September 2019

Lachstock Consulting, September 4, 2019
Grains futures markets settled between 1 and 3 per cent lower, oilseeds barely changed.
  • Chicago wheat December contract down 9 cents per bushel to 453.5c;
  • Kansas wheat December contract down 15c to 382.25c;
  • Minneapolis wheat December contract down 9.25c to 487c;
  • MATIF wheat December contract down €2 per tonne to €166;
  • Corn December contract down 8.75c to 361c;
  • Soybeans November contract down 0.5c to 868.5c;
  • Winnipeg canola November contract down c$0.50 to C$447.50;
  • MATIF rapeseed November contract down €0.25 at €381;
  • Brent crude November contract down $0.40 per barrel to $58.26
  • Dow Jones index down 285.26 to 26,118.02 points;
  • AUD strengthened to US$0.6762
  • CAD weakened to $1.3341
  • EUR weakened to $1.0971
In the wheat pits Chicago settled down -9 usc/bu closing at 453.5usc/bu, Kansas was -15 usc/bu lower to settle at 382.25usc/bu, while Minni softened -9.75 usc/bu to go out at 487usc/bu. Corn fell -8.75 usc/bu to go out at 361usc/bu while Beans were down -0.5 usc/bu to settle at 868.5usc/bu WCE Canola softened -0.5 CAD/mt closing at 447.5CAD/mt with Matif Canola finishing lower by -0.25 Eur/mt. In outside markets the Dow Jones fell -285.26 points, Crude was down -0.71 bbl the Aussie was 0.00424 higher to settle at 0.67588, the CAD rallied 0.0008 while the EUR gained 0.0003
Markets returned from the Labor Day long weekend with their selling boots on. Kansas wore the brunt of the selling post last week’s relative strength against the other wheat contracts which is probably more a reflection on the heavy global picture. Matif wheat plumbed new lows on the move and Black Sea wheat showed more sellers than buyers. The US spring wheat crop is now pegged at 55pc harvested vs 78pc average for this time of the year.
Beans are an interesting one given the lateness of the crop. Ideas that corn hasn’t really been adversely affected from the late growing season seem more common – due mainly to the lack of frost events – however, beans are less about seasonal conditions and more about sunlight hours. This is a strange year – and a hard one to predict – but there seems to be mounting concerns around soybeans. The counter argument has been the demand erosion due to African Swine Fever with numbers suggesting that over 35pc of the Chinese hog heard has been destroyed. This does, in part, ignore the fact that there has been a demand response in competing proteins – mainly chicken which will partially offset feed demand. I am yet to meet someone that is confident about Chinese animal numbers but those that track implied soybean disappearance suggest meal demand is down around 12-13pc. Yes this will have an impact but not to the extent that many are suggesting and is still a question mark if the US crop production ideas need to be re-set.
Markets in Australia continued to firm over the day again $3-4/t on the back of uneventful forecast. Late this week will have some chance of rainfall for SNSW, a lot riding on this event as growers make decisions now on gross margins. Showers fell through WA in the past 24hrs with parts of Esperance missing out. A front pushed through parts of SA and into the Mallee and showers were predicted to continue to fall through Victoria.


Source: Lachstock Consulting


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