Markets

Daily Market Wire 7 May 2021

Lachstock Consulting, May 7, 2021

Wheat squeezed 8.75usc/bu higher to settle at 753.25usc/bu, Kansas 9.75usc/bu to close at 726.75usc/bu and Minni added 8.5usc/bu to go out at 790.5usc/bu. Beans outperformed everything rallying 27.25usc/bu, finishing at 1569.75usc/bu. Corn added 10.25usc/bu and Soybean meal and oil finished USD$2.9/st and 0.89usc/lb higher respectively. Canola continued its rocket shot – adding another CAD$30/mt while, in outside markets, crude was a rare red print falling USD$0.92/bbl to close at USD$64.67/bbl, the AUD was trading at 0.7782 and the Dow added 318.19 points – setting a new record at 34,548.53 points .

  • Chicago wheat July contract up US8.75c/bu to 753.25c;
  • Kansas wheat July contract up 9.75c/bu to 726.75c;
  • Minneapolis wheat July contract up 8.5c/bu to 790.5c;
  • MATIF wheat September contract up €4/t to €230.25/t;
  • Corn July contract up 10.25c/bu to 718.75;
  • Soybeans July contract up 27.25c/bu to 1569.75c;
  • Winnipeg canola July contract up C$30/t to $963.50;
  • MATIF rapeseed August contract up €18.25/t to €540.50/t;
  • US dollar index down 0.4 to 90.9;
  • AUD firmer at US$0.778;
  • CAD firmer at $1.216;
  • EUR firmer at $1.207;
  • ASX wheat July contract up $3/t to $317/t;
  • ASX wheat January 2022 up $4/t to $321/t.

International

  • The UN food agency released their Food and Agriculture food price index which increased for the 11th consecutive month and printed the highest level since 2014.
  • The FAO cut global wheat production by 6 million tonnes (Mt), mainly attributed to cuts in Europe. They also increased their utilization of global cereals with a big kick in corn feeding in China and the US.
  • China’s state economic planner has pulled the plug on any economic talk between Australia, sighting Australia’s cold war mindset and ideological discrimination. Australia’s Trade Minister Dan Tehan indicated the decision was disappointing as the economic dialogue was “an important forum for Australia and China to work through issues relevant to our economic partnership”
  • More of the same – conjecture around the potential damage to the Brazilian corn crop is the match that has ignited global cereal markets – now the pressure is on the wheat market to take up some of the feeding heavy lifting. In these kind of markets, the focus will be on the areas of concern rather than the origins that are performing – parts of the US and Canadian plains are certainly dry – this has, in part, allowed the US wheat market to rally well above any of their export competitors. Meanwhile, the Russian crop continues to look good and the EU has been filling in some of the problem areas. But, for the moment at least, this doesn’t matter – its all about corn and the risk that the US has an issue throughout their growing season. Risk premium remains.

Australia

  • Local current crop values were again relatively unchanged across the boards and we saw a spike in liquidity being traded with the focus still being execution and delivered into the ports.  Delivered Geelong/Melbourne ASW1 for last half May/June finished the day at A$340/t.
  • New crop canola markets continue to fire and as channel 7AFL reporter Brian Taylor would say WOW WEE! KWI port zone finished the day with bids over $800 FIS and is set to keep firing today with last night boards moves higher again.
  • Weather maps have built some more precipitation in the models for SA with the 8-day outlook increasing to a widespread 10mm across the cropping areas, but we continue to see the high pressure system hang around the Bight
  • Favourable conditions for western and north eastern Victoria while the Wimmera/Mallee regions still look tough again for rainfall over the next 10-15 days.
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