Markets

Daily Market Wire 9 February 2021

Lachstock Consulting, February 9, 2021

Markets rose between 1pc and 2pc. Corn jumped 15.25c per bushel after better-than-expected inspections hit, and soybeans gained 21c on more talk of spot Chinese buying.

  • Chicago wheat March contract up US14.5 cents per bushel to 655.75 641.25c;
  • Kansas wheat March contract up 14.25c/bu to 639.5 625.25c;
  • Minneapolis wheat March contract up 9.25c/bu to 635.25 626;
  • MATIF wheat March contract up €2 to €226.50 224.50/t;
  • Corn March contract up 15.25c/bu to 563.75 548.5c;
  • Soybeans March contract up 21c/bu to 1387.75 1366.75c;
  • Winnipeg canola March contract up C$4/t to $696.30 692.30;
  • MATIF rapeseed May contract up €5/t to €444.75 439.75;
  • Brent crude April up US$1.22 per barrel to $60.56;
  • Dow Jones index up 237 to 31,385;
  • US dollar index down 0.05 to 90.95;
  • AUD firmer at $0.770;
  • CAD firmer at $1.274;
  • EUR firmer at $1.205

International

We’re one trading session away from the USDA’s February World Agricultural Supply and Demand Estimates report. Given the corn balance-sheet impact of recent US corn sales to China, there’s more than normal interest in how the USDA will balance the figures. Uncertainty going into Tuesday’s report will likely see markets take some more risk off in the next 24 hours.

StatsCanada stocks report as at 31 December 2020 pegged total wheat stock at 24.8 million tonnes (Mt) and canola at 12.1Mt.  Wheat was a little tighter than some had thought, but neither figure was a real shock to the market. March and July stocks reports often have some significant adjustment/residual factors.

US sales flashes had 102,000t of corn to unknown for the old crop.

South American weather maps are starting to show a little bit of moisture on the extended run models for central Argentina into later next week, but dryness remains a concern.

Brazil’s harvest is still slowly plugging along, though rain delays to harvest are still bringing major delays to exports. Focus is shifting to the delayed safrinha crop planting. In spite of the better moisture prospect being of general benefit, a long planting delay would raise concern about yield potential.

Russian export tax formulas for the new season got official approval late last week, but there has been more discussion about whether the government’s assumptions for the formulas will work. There’s potential for more volatility if it were to become significantly unhedgable.

Chinese New Year this year is on Friday, and the week of holidays from the 11-17 February will shut down most of the country. Some are expecting to see more sales business in the next few days in a rush to get it across the line before the holidays.

The USDA outlook forum in mid-February will be electronic this year. Lachstock notes the afternoon sessions on 18 February, which in Australia would be mid-morning on 19 February, will include a focus on the USDA’s view of Chinese market impacts. It’s free to register and attend for those who wish to tune in.

Australia

Monday’s Australian markets were quiet and largely unchanged from last week. Trade buying interest retreated again, and logistics trade has continued to tick over.

The Bureau of Meteorology is forecasting development of a new storm event into this coming weekend for northern and central New South Wales, showing potential for 15-20 millimetres on the last runs, and longer-term maps are adding some more chances for the Darling Downs of southern Queensland.

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