Markets

Daily Market Wire 5 August 2021

Lachstock Consulting, August 5, 2021

Corn and wheat continued yesterday’s fall. Prices of canola and soybeans lifted.

  • Chicago wheat September contract down US5c/bu to 717.25c;
  • Kansas wheat September contract down 13.25c/bu to 694.25c;
  • Minneapolis wheat September contract down 16.75c/bu to 903c;
  • MATIF wheat September contract down €4/t to €224.25/t;
  • Corn September contract was down 4.75c/bu to 545.75c;
  • Soybeans September contract up 8.25c/bu to 1332c;
  • Winnipeg canola November contract was up C$17.70 to $872.80;
  • MATIF rapeseed November contract up €5.25/t to €533.25/t;
  • US dollar index up 0.3 to 92.3;
  • AUD weaker at US$0.738;
  • CAD unchanged at $1.254;
  • EUR weaker at $1.184;
  • ASX wheat September contract down $1/t to A$327/t;
  • ASX wheat January 2022 down $2/t to $326/t.

International

Grains sold off across the boards last night, beating down an early bounce to see Chicago close -7 1/4¢, KC -13 1/4¢, Minny -16 3/4¢, and Matif -4€ on the earlier close.  Corn was down 4 3/4¢ and beans bounced up 8 1/4¢ (Matif +5.25€, Winnipeg +$17.7)  into the close.  Macro markets have crude trading back down nearly two bucks to $67.9 WTI / $70.4 Brent and the DOW dropped 324 points after some disappointing earnings figures and weak payroll results from a private survey.  The AUD is trading around 73.7¢, the CAD $1.254, the EUR $1.184, and the USD Index at 92.3.

Coronavirus cases, and the associated economic recovery worries, continue to surge globally with the bounce in the US the latest to spook markets.  New lockdowns in Israel and China plus calls for more restrictions elsewhere are not helping market worries.

At the same time, Chinese government interference in commodity markets is drawing new attention again after more reports the other day about investigations into “Abnormal Trading behaviour” as they try to stamp down the rally in commodity prices there.

Germany’s farmer association has cut their wheat crop estimate by nearly 2 million tonnes (Mt) after the late July rains and associated losses.

France’s Ag Ministry has also recently cut their wheat crop estimate, down about 0.5Mt to 36.7Mt for similar reasons.

USDA WASDE and crop production reports will publish 12 August, a week from today.

US Corn Belt weather maps have expanded the forecast moisture for the northern Corn Belt later this weekend, with latest runs forecasting a widespread inch to inch and a half plus across Iowa and southern MN/WI/northern IL.

StoneX, formerly INTL FCStone, crop estimate on US corn and soybean yields has been attracting attention from both bulls and bears having pegged corn yield at 176.9 bu/acre (USDA 179.5), and beans at 50.0 (USDA 50.8).  Plenty of disagreement in the market about individual state and national yield chances though.

Weekly US ethanol production dropped to 1.013 billion bpd, down nominally from the week prior. Ethanol stocks broke off 84k barrels.

A trucker strike in Argentina has delayed export load outs there with grain receivals dropping to a crawl and port lineups building.

Black Sea harvest continuing to plug along, although some rains coming in for the eastern EU/western UKR will bring a few delays.  Russian government estimates pegged wheat harvest at 14.3 million ha completed, up nearly 1.5 million ha from the start of the week in the hot/dry weather.

Australia

The RBA statement on monetary policy will be released on Friday at 1130.

The weekend rains in WA still forecast at a general 10-15 mm across the wheat belt.

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