Daily Market Wire 6 September 2019

Lachstock Consulting, September 6, 2019
Grains were up, oilseeds were down.
  • Chicago wheat December contract up 5.5 cents per bushel to 466.25c;
  • Kansas wheat December contract up 9.25c to 393.75c;
  • Minneapolis wheat December contract up 8c to 502c;
  • MATIF wheat December contract up €0.75 per tonne to €167;
  • Corn December contract up 0.25c to 358.75c;
  • Soybeans November contract down 14c to 861.5c;
  • Winnipeg canola November contract down C$1.20 to C$445.30;
  • MATIF rapeseed November contract unchanged at €383.25;
  • Brent crude December contract up $0.21 per barrel to $60.04;
  • Dow Jones index up 372.68 to 26,728.15 points;
  • AUD strengthened to US$0.6813
  • CAD weakened to $1.3229
  • EUR strengthened to $1.1036
In the wheat pits Chicago settled up 5.5 usc/bu closing at 466.25usc/bu, Kansas was 9.25 usc/bu higher to settle at 393.75usc/bu, while Minni rallied 8 usc/bu to go out at 502usc/bu. Corn gained 0.25 usc/bu to go out at 358.75usc/bu while Beans were down -14 usc/bu to settle at 861.5usc/bu WCE Canola softened -1.2 CAD/mt closing at 445.3CAD/mt with Matif Canola finishing lower by 0 Eur/mt. In outside markets the Dow Jones gained 372.68 points, Crude was up 0.08 bbl the Aussie was 0.00165 higher to settle at 0.68132, the CAD rallied 0.0004 while the EUR was unchanged.
Markets offshore managed to post the second day of green – Minni and Kansas leading the charge. The old saying “nothing cures high prices like high prices” can be flipped – at some point, sustained lower values will eventually entice the consumer. Saudi, Jordan, South Korea, Indo and the Philippines have all been mentioned overnight either tendering or sniffing. Additionally the Australian production downgrades are also gaining momentum as reflected in the latest Lachstock Consulting wheat SnD which pegged Aussie wheat at 19.4Mt (USDA 21Mt). It’s not all smiles and high fives from a price perspective however – corn conditions into the last quarter of the growing season are without risk – nothing on the frost side.
Domestically the strength continues albeit with some wide bid offer spreads. It’s an interesting market when you consider the push and pull between domestic demand and export parity. A Queensland cattle feeder is essentially an Asian consumer – competing against the likes of the Philippines and Indonesia for WA grain. They do have the ability to source SA grain but southern NSW is pricing to keep the grain at home. These spreads are going to be the driver of supply but will also define the “plan B”. In a year with little carry in consumers will be focused on their ability to source physical grain and may need to solve a problem by going to the second best option. Interzone spreads will be watch closely and will change with production prospects into harvest.


Source: Lachstock Consulting


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