Markets

Daily Market Wire 8 February 2024

Lachstock Consulting, February 8, 2024

Amid a generally “down” day for grains and oilseeds the Chicago Soft Red Winter wheat market gained one percent.

  • Chicago March 2024 wheat up US7c/bu to 602c/bu;
  • Kansas March 2024 wheat down 0.25c/bu to 618.25c/bu;
  • Minneapolis March 2024 wheat up 3c/bu to 696.25c/bu;
  • MATIF wheat March 2024 down €2/t to €209/t;
  • Black Sea wheat futures has not quoted since 11 August 2023;
  • Corn May 2024 down 4c/bu to 446.5c/bu;
  • Soybeans May 2024 down 10.75c/bu to 1197.5c/bu;
  • Winnipeg canola May 2024 down C$1.10/t to C$599.40/t;
  • MATIF rapeseed May 2024 down €10.50/t to €410.75/t ;
  • ASX March 2024 wheat unchanged at A$366/t;
  • ASX March 2024 barley unchanged at A$298.50/t;
  • AUD dollar down 2 points to US$0.6520

International

Futures markets are seemingly immune to the domestic US fundamentals. If you place any weight on deliverable stocks the US futures curve needs to do some work as we enter March delivery. Historically low stocks and increased loadouts from Duluth, Minnesota are at odds with a market that has little to no support. Meanwhile, from a global standpoint, the EU/Black Sea weight has forced Russian FOB values back close to the June 2023 lows.  

I’m constantly guilty of over complicating things – it’s worth reminding that China is the driver for global Ag values and its domestic futures markets provide little in the way of inspiration. Dalian Commodity Exchange (DCE) corn and hogs are both near long term lows, a sobering fact considering the pork sector is a big component of China’s domestic feed demand. China equities have managed to rally slightly, some suggesting the govt initiatives are finally having an impact. Interesting that Goldman Sachs and Citi both are extremely bullish iron ore post China’s central backs announcement to cut the amount of reserves banks must maintain. The change would inject more than US$140b back into the economy.  

Indonesia will head to the polls on Feb 14 to choose its next president and President Joko Widodo, will leave office after 10 years in the chair.  

Ahead of the USDA crop report, US corn futures hit the lowest level in three years. South American production and a lack of Chinese activity due to Chinese New Year are driving values lower. Brazilian national agricultural agency, CONAB, tonight will report its South American production estimates.

Australia

Local markets have been somewhat subdued over the last week with spot demand linked to export demand the main feature.  

ASX Jan-25 futures tested recent lows, settling at A$375/t, while current crop delivered Melb ASW1 was down $1-2/t to close at $366/t for March delivery.  

In the north, the recent slide in sorghum values has found some support, albeit quiet with only the odd header rolling. Discussions around export parity have been validated by spot box demand, however, bulk demand still seems sidelined. The true test of value will be post-Chinese New Year and post-USDA WASDE report. This will be the best barometer for sorghum export parity once traders have been able to input physical numbers in their global corn balance sheet.

 

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