Markets

Daily Market Wire 5 October 2020

Lachstock Consulting, October 5, 2020

Friday’s futures saw mixed small moves.

  • Chicago wheat December contract up US3 cents per bushel to 573.25c;
  • Kansas wheat December contract up 3c/bu to 509.5c;
  • Minneapolis wheat December contract down 1.75c/bu to 531.75c;
  • MATIF wheat December contract down €0.25 per tonne to €196.75;
  • Corn December contract down 3c/bu to 379.75c;
  • Soybeans November contract down 2.75c/bu 1020.75c;
  • Winnipeg canola November down C$0.20/t to $517.10;
  • MATIF rapeseed November contract up €0.25/t to €389.50;
  • Brent crude November contract down US$1.66 per barrel to $39.27;
  • Dow Jones index down 134 points to 27,683;
  • AUD unchanged at $0.719;
  • CAD higher at $1.328;
  • EUR weaker at $1.173.

Markets

With the news of President Trump testing positive for coronavirus, the market will remain uncertain and volatility will continue to remain strong in the lead-up to the election in a month’s time. The grain markets didn’t do much with the news on Friday.

Rumours about Russian wheat export restrictions have returned, with Russian agriculture consultancy SovEcon reporting that the Ministry of  Agriculture would review and likely update a wheat export quota in mid-October for the January-June timeframe.  The headlines read bullish, and provided some support to technical traders.

USDA’s October WASDE report will be out on Friday, with markets looking to see how it will balance the updated stocks and production figures against new-season demand estimates.  Corn exports remain a hot topic, with questions about China the key.  There has been far more business reported done than its latest 7-million-tonne import estimate.

StoneX , formerly FC Stone, estimates US corn yield at 179 bushels per acre, a decrease from its previous estimate of 179.6 bushels.

US farmers remain reluctant sellers at current prices until they have a better idea of yields, and recent support from lower stocks is providing optimism for higher prices.  Corn harvest estimates for this week sit at around 20-per-cent complete.

Hot weather in Brazil’s soybean growing areas, with an average daytime temperature of 40 degrees Celsius will slow soybean plantings.  If planting pushes into late October, the risk premium in the market will increase, given the potential yield reductions and delay when the new-crop will be available to be shipped, and increases the already heavy reliance that China has on the US at the moment.

The Commodity Futures Trading Commission weekly Commitment of Traders report on Friday saw managed money increase corn length by 10,000 contracts for the week, CBOT wheat fell 3500, KC was up 6000 and soybeans dropped 7000.

Australia

Weekend rain saw 10-15 millimetres in parts of the South Australian Mallee, and 20mm plus for much of the Eyre Peninsula, and 20-30mm is forecast for Victoria and the Riverina in southern New South Wales this week. However, the outlook remains dry for Western Australia.

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