Markets

Daily Market Wire 5 May 2020

Lachstock Consulting, May 5, 2020

Oilseeds and corn were weaker. Wheat mostly firmer.

  • Chicago wheat July contract up US3¢/bu to 519.5¢;
  • Kansas wheat July contract up 4c to 487¢;
  • Minneapolis wheat July contract up 1.5c to 508.25¢;
  • MATIF wheat September contract down €0.25 to €184.25/t;
  • Corn July contract down 3c/bu to 315.5¢;
  • Soybeans July contract down 13¢/bu to 836.5¢;
  • Winnipeg canola July contract down $C2.60 to $463.60/t;
  • MATIF rapeseed August contract down €2.50 to €365/t;
  • Brent crude July contract up US$0.76 per barrel to $27.20
  • Dow Jones index up 26 points to 23750;
  • AUD firmer at $0.6420;
  • CAD firmer at $1.409;
  • EUR weaker at $1.090.

Markets

Wheat started the week with small gains, even as row crops broke off again with the return to US/China politics.  Chicago closed up 3¢ to 519.5¢, KC +4¢ to 487¢, Minny +1.5¢ to 508 1/4¢, and Matif off 0.25€ to 184.25€ on the earlier close.  Corn dropped three cents to 315.5¢ and beans gave up 13¢ to 836.5¢ (Winnipeg down $2.6 to $460.6).  Crude oil has firmed with WTI trading over $20/barrel amid calls for celebration from some beleaguered longs.  WTI is $21.2 currently / $27.2 Brent and the DOW was up 26 points.  The AUD’s steady to nominally stronger at 64.2¢, the CAD $1.409, and the EUR $1.090.

Although the world’s been gradually shifting into “recovery” mode, the ongoing and escalating politics over coronavirus and China’s response/coverup/denial, depending on your point of view, has stumbled back into the ag sector.  Now we’ve got the risk of renewed tariffs as “punishment”, which no one expects China to take lying down.  Even without such measures, US President Trump has already talked about killing the trade deal if China does not meet its obligations. China’s shipments of US agricultural products appear far behind the pace. Political black swan risks abound.

The US weekly crop progress report released after the close saw corn planting well  underway, rising to 51pc nationally. Typical pace at this time in recent years has been 39pc. It seems weather had delayed planting less than some had expected. The was a big push in the I-states, Iowa, Illinois and Indiana.

US soybean planting progress rose to 23pc and sorghum started moving in the southern Plains. Sorghum progress was 22pc nationally, bolstered by 5-7pc moves  this week across Nebraska through Oklahoma.  The capacity of the US row crop farmer to plant the crop when weather allows is absolutely astounding and is a good reminder for other, more weather impacted, years about how quickly they can catch up.  Wheat national crop conditions were up one point good/excellent to 55pc, and spring wheat hit 29pc planted.

US weekly export inspections saw 1.2 million tonnes corn exported, 318,000t beans and 535,000t wheat.  The numbers were slightly better than some had thought on corn, but overall no major surprises. Two cargoes of recently sold sorghum to China were shipped. Durum exports this week were 39,000t, mostly to Italy.

Global weather worries on wheat continue, but some more moisture is forecast for the northern EU and southern Black Sea areas.  While it’s hard to know just how much damage has already been done, because crop tours are limited by Russian coronavirus lockdowns, field reports are confirming some of what the bulls had been anticipating; southern areas needed the rain two weeks ago and some severe damage is being reported.  EU is generally more optimistic though, as are some parts further north into Central Russia.

USDA’s first new season WASDE figures will be released in the US next Tuesday.

Australia

Recent rains have left parts of the east coast held up from planting until fields dry out a little, well worth it for the moisture though.  Canola’s mostly wrapped up, and moving mid-way into cereal planting.  Old crop values, continuing to weaken after the moisture, are down some $20/t from a bit over a week ago, and buying demand remains stagnant.

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