Markets

Daily Market Wire 5 April 2019

Lachstock Consulting, April 5, 2019

US future mostly closed little changed, though soybeans were firmer; Thursday’s settlements as follows;

  • CBOT wheat May contract down 0.25c to 470.75c per bushel
  • Kansas wheat May contract up 2.75c to 439.5c
  • Corn May contract up 2.5c to 365.25c
  • Soybeans May contract up 7.75c to 906.5c
  • Winnipeg canola May up C$2.60 to $458 per tonne
  • MATIF rapeseed May contract up €1 to €362.50/t
  • Dow Jones up 166.50 points to 26,384.63
  • Crude oil May contract down US$0.36 to 62.10
  • AUD up to 0.7120
  • CAD down to 1.335
  • EUR down to 1.122

Commentary on markets

A quiet day in the grain markets – After rallying in the overnight session on limited volume, Chicago wheat closed down 1/4¢ to 470 3/4¢, KC +2 3/4¢ to 439.5, and Matif up 1€ to 189.5. Minny continued to sell off, dropping another 7.5¢ to 527 1/4. Corn picked up 2 1/2¢ to 365 1/4 and beans jumped 7 3/4¢ to 906.5 amid optimism over a China deal. Winnipeg canola followed beans up $2.6 to $458 and Matif was up 1€ to 362.5. Brent crude oil made headlines after briefly topping $70/barrel again (broke back to $69.4 later in trading) and WTI closed down 35¢ to $62.1. Currencies have held steady, with the AUD at 71.2¢, the EUR $1.122, and the CAD $1.335.

China deal a chance

As mentioned on the bean markets, the latest news headlines suggesting a Chinese deal is imminent (and that US President Trump will announce a summit to sign one – which the White House earlier denied) have sparked some optimism – the DOW is up 166 points. There have also been reports that China will have 5-6 years to meet any promises made, which is re-raising concerns about enforcing the “deal”. Outside of the rumor mill, the latest official comments (as of writing) continues to report “substantial progress” yet again . . . and it has officially been a year since China imposed tariffs on US soybeans.

Solid result

US export sales were better than expected on wheat at 1.0 MMT (both seasons) vs thoughts sub 900 – do note that this includes the two GASC boats and Iraqi flash sales. Beans were also on the positive end, with some 1.9 MMT sold (vs thoughts closer to 1 MMT). Given the 1.7 MMT of Chinese business in the sales though, it appears that the 1.9 reported included both the Chinese flashes (perhaps delayed in flash reporting) and aligns with prior rumors that they were sold on Thursday (the only way they could fit in the export sales window). Corn sales disappointed estimates, with only 537 kmt vs hope of 700-1000, but there was also another milo boat sold to Spain (no additional Chinese demand though). On a quick humanitarian note, we do see that a Russian wheat donation arrived in North Korea earlier this week as part of a UN program to attempt to alleviate the ongoing famine there.

…and leading into the weekend

Global news has been mostly quiet, with EU/BSEA markets watching the forecast for rains into the southern EU (with some noting that even after the recent rains parts of France are still too dry to be “ideal”) as planting continues for spring crops. Russian and Vietnam have reportedly agreed to re-allow Russian wheat exports (which have been restricted in recent months on phyto concerns), though exact details are yet to be determined. Argentine corn harvest is reported up to 17% complete and over 10 MMT harvested to date (crop estimates unchanged from local groups). Back locally, we do note that GrainCorp has formally announced their plans to spinoff the malt unit and further restructure their grain operations.
A reminder that next Tuesday night (mid-day US time) will be the April WASDE from the USDA.

Source: Lachstock Consulting

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