Daily Market Wire 5 August 2019

Lachstock Consulting, August 5, 2019
Futures prices were firmer on Friday.
  • Chicago wheat September contract up 15 cents per bushel to 490.75
  • Kansas wheat September contract up 6c to 421.75c,
  • Minneapolis wheat September contract up 3.75c to 522.25c,
  • MATIF wheat September contract down €0.25 per tonne to €173.25;
  • Corn September contract up 6.75c to 399.5;
  • Soybeans August contract up 3.25c to 850.25c;
  • Winnipeg canola November contract up C$2.80/t to $444.80;
  • MATIF rapeseed November contract down €1.25 at €374.50;
  • Brent crude October contract up $1.49 per barrel to $61.89;
  • Dow Jones down 98 points;
  • AUD weakened to US$0.6790c;
  • CAD weakened to $1.319;
  • EUR strengthened to $1.112

Friday markets in the US saw wheat and corn recover back most of their losses on Thursday (after the tariff announcements), while beans saw less support. Chicago wheat closed up 15¢ on to 490 3/4¢, KC +6¢ to 421 3/4¢, Minny +3 3/4¢ to 522 1/4¢, and Matif was up a quarter of a euro to 173.25€ on the earlier close.  Corn was up 6 3/4¢ to 399.5¢ close while beans were up three and a quarter cents to 850 1/4¢ (Winnipeg canola up $2.8 to $444.8).  Crude oil also firmed back sharply, picking up $1.7 to $55.7/barrel on WTI / $61.9 Brent, while the DOW has continued to fall (off 98 points as of Friday).  The AUD weakness has continued (trading at 67.9 currently, while the EUR is a $1.112 and the CAD steady at $1.319.  The expanded tariffs on Chinese goods remain a point of global discussion – and headlines have suggested that they were applied almost entirely at the insistence of US President Trump (in direct contrast to his advisors).

Updated crop progress/conditions reports will be out late tonight in the US, with the focus (once again) on row crops – most are looking for some improvement, but with the dry spell in the central corn belt there are some reports coming in about moisture stress showing up in the crop.  Cooler weather into this week will do nothing to speed along maturity (in this year’s delayed crop), but some light rains forecast for the majority of the corn belt (including an inch across most of Iowa) will be well recieved.  Meanwhile, over in Europe, France’s AgriMer has further cut their estimate of the crop condition there (down 6% from last week to 61% good/excellent).  Harvest is on it’s final legs there, and French wheat should be around 90% cut as of today.  Ukraine’s cereal harvest is also almost done, with government data there around 90% as of Friday.

Australian markets are gradually picking back up after the conference last week, and there also looks to be some better chances for continued rain in southern and central NSW later this week.  We do note that El Nino is continuing to fade on the forecast models, but short term rain patterns are the more pressing consideration.  Although we put little faith in two week model runs, the last GFS results are also calling for this weekend rain to push into northern NSQ and QLD.

A reminder that next Monday (the 12th) US time will bring updated WASDE reports, and likely some changes to acres (given the resurvey).  As there is no objective yield survey included in this report (after being cut last year), there are some open questions as to how the USDA will treat the mix of yield/acreage variation.

Source: Lachstock Consulting




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