Markets

Daily Market Wire 5 March 2019

Lachstock Consulting, March 5, 2019

US wheat futures closed lower, corn and beans higher, canola mixed.

  • CBOT Wheat May contract was down 1.75c to 455.5c
  • Kansas wheat May contract down 1.75c to 443c
  • Corn May contract up 1.75c to 374.75c
  • Soybeans May contract up 4.5c to 916
  • Winnipeg canola May contract up C$1.50 to $462.80
  • MATIF canola May contract down €4/t to €351.50
  • Dow Jones down 206.67 points to 25,819.65
  • Crude oil up $0.79 to 56.59
  • AUD down to 0.708c,
  • CAD down to 1.332c,
  • EUR down to 1.133c.

Market commentary

Wheat gave up Friday’s gains after poor export inspections, with Chicago -2¢ (-4¢ out the curve), KC unch (-2 to -7¢ out the curve), Minny -7¢ (-2¢ out the curve), and Matif was up 1€ on the prior close.  Corn has gained 2¢, beans +5¢,  and canola +$1 (Matif rapeseed -2€ on prior close).  The DOW has broken down 222 points while crude is up 71¢ (+54¢ on Brent) to $56.5.  The AUD is holding at 70.8¢, the CAD slightly weaker at $1.332, and the EUR is off half a cent to $1.133.  The latest talk is that trade discussions between the US and China will be resolved by the end of the month – but again nothing concrete besides rumours and headlines.

Export news

US export inspections came in at 440,000t for wheat (vs ideas >600,000t), 844,000t for beans, and 866,000t for corn.  No big surprises on destinations – the Algerian load is from a much older sale and not indicative of current market.  Meanwhile, Saudi wheat results from last week’s tender ran in the mid US$240s candf per tonne for Red Sea arrivals and are likely to be filled with mostly EU wheat, but at this price level could well be some HRW in the mix as it’s optional origin.  Still no news on a barley tender there – will we see one mid-week?  At the same time, the cheapest Iraqi wheat offers reportedly US$294/t candf for HRW – vs Aussie US$314/t on one offer (no results yet confirmed).

Australia

Back locally, ABARES is holding their outlook conference today – and updated their long term outlook estimates to take next year wheat production to 23.9 million tonnes (Mt). Lachstock estimated 26.1Mt and flagged to 24.5Mt with drought.  ABARES barley estimate is 8.8 Mt (Lachstock 10.), and canola 3.7Mt (Lachstock 3.1).  They’ve appropriately noted the significant risk to new season plantings in the drought, and Lachstock expect this to be a significant discussion point during the conference (with news headlines likely to follow).

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