Markets

Daily Market Wire 8 April 2019

Lachstock Consulting, April 8, 2019
Grain markets lower on lack of bullish news.
  • Chicago wheat down 3 cents per bushel to 467.75c;
  • Kansas wheat down 8.25c to 431.25c;
  • MATIF wheat down  €0.25 per tonne to €189.25;
  • Minneapolis wheat down 4.75c to 522.3c;
  • Corn down 2.75c to 365.5c;
  • Soybeans down 7.5c to 899c;
  • Winnipeg canola up C$0.60/t to $457.4,
  • MATIF rapeseed down €1 to €361.50.
  • Brent crude oil up US$1 per barrel to $70.30;
  • Dow Jones up 166 points;
  • AUD at 71.1c,
  • EUR at $1.122;
  • CAD at $1.339.

Market news

US grain markets broke off on Friday, with little new to be found to spur the bulls, and some ongoing position-squaring ahead of the next World Agricultural Supply and Demand Estimates Report (WASDE) tomorrow. Saudi Arabia’s Aramco issues its first public bonds, reportedly well over subscribed. The Dow Jones Industrial average rose on hopes that a trade deal is close between the US and China which will resolve their dispute, a media release on the subject suggested a deal is “closer and closer”, with potential for a summit in four weeks.
On a macro note, this week will likely have as much Brexit talk as trade-war discussion, with the UK parliament intends to vote again by Wednesday for EU review. If it cannot pass a deal, the deferred “Hard Brexit” deadline is Friday.
CFTC figures released Friday confirmed expectations for a large increase in corn shorts after the prior Friday’s reported sell-off. Corn-managed money was short 246,000 versus 203,000 the previous week, beans were short 74,000 versus 51,000 the previous, and wheat was slightly less short at 56,000 versus 64,000 the previous week. Minneapolis wheat was short 2,100 from around 1,500 the previous, but with the CFTC data only as of 2 April, the current real position is likely much shorter after the sell-offs.

Weather

More snow and rain is on the radar for this Wednesday and Thursday across already saturated parts of Nebraska and Iowa, while blizzard conditions prevail across South Dakota and Minnesota. As we approach mid-April, concerns are continuing to build about the impact on row-crop planting, with some flooded lowlands already basically written off because they are unlikely to dry out before planting deadlines. The question is how large the final impact will be; if conditions improve into early May, the US corn farmer has an incredible ability to plant corn quickly. The first published USDA National Corn Planting Estimates should be out tomorrow morning, but flood-impacted areas normally do not pick up pace for another week or two. This is also an ongoing concern for central Soft Red Winter wheat areas, with heavy storms adding to flood risks along the Ohio River. In the EU, French corn is reportedly some 8 per cent planted, and the wheat crop there is estimated at some 84pc good to excellent, which is 1pc lower than the previous week.
In Australia, with the other week’s moisture rapidly disappearing, we’re still looking for a follow-up rain on the east coast, but weather models are not providing much there. Light showers across Western Australia off the edge of Cyclone Wallace will be appreciated later this week, but storms in the Southern Ocean are not yet pushing much north into South Australia.

WASDE

The April US WASDE report will be released tomorrow. This is normally a quiet report, as the USDA will not publish its new-crop estimates for 2019-20 until the May WASDE. Estimates are mostly all for heavier corn and wheat carry-outs, especially after the stocks report in corn, and mostly unchanged bean figures.

Source: Lachstock Consulting

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