Market news overnight wrap

A reminder that Friday (US time) is the winter wheat seedings report and final 2019 row crop figures.

• Macro volatility pushed around the entire market following Iranian attacks
• Chinese trade deal still attracting hopes from the bulls, though in the meantime we’ll see USDA figures on Friday for wheat.
• Weather forecasts drying back out across the south and renewing fire risks amidst scorching weather
• It’s been a volatile market through the last 24 hours, with markets spooked across the board by Iranian missile attacks and then some positivity trickling back in after indications that there were no casualties and that the US would not retaliate militarily.

On the close, CBOT wheat ended +2.5¢ to 552 3/4¢, KC +5¢ to 480¢, Minny +1¢ to 547 3/4¢, and Matif +1.5€ to 190€ on the earlier close.  Corn dropped a quarter of a cent to 384.25¢, while beans were up 3 1/4¢ to 947 1/4¢ (Winnipeg +$1 to $480.7, Matif +0.75€ to 417.25€).

Crude oil has traded a >$5 range, spiking over $65 per barrel on the first missile attack news and then dropping down sub $60 later in the day (US time) – around a $59.6 currently ($65.4 Brent).

Gold is also back down towards $1558 after pushing over $1600 for the first time since 2013.  The DOW is up 265 points while the AUD is trading at 68.7¢, the CAD $1.302, and the EUR $1.111.

Egyptian buying agency GASC picked up five boats in their post-Christmas tender, buying a mix of Black Sea origins as expected.  One French offer was in the mix but far from competitive after freight. The ongoing rail strike there doesn’t appear to be helping anything on the grain front.

We did also see some flash sales from the USDA finally – but for new season corn to unknown.

There’s been nothing yet to confirm or suggest hoped-for Chinese activity.  More private Chinese bean purchases of Brazilian new crop beans have been discussed though which is not abnormal given that harvest is about to start.  There have been some reports about early harvest in recent days, but majority still to come.  Nonetheless Chinese Brazilian discussion is still disappointing to those hoping for more direct purchases of US beans with the trade deal.

Brazil’s Agriculture Ministry released latest crop estimates calling beans at a new record 122.2 million tonnes (Mt), up 1Mt from a month ago.

Confirming earlier rumours, the broader news media has also reported that China will delay implementation of their ethanol mandate given limited availability.  That was always going to be a concern given the aggressive nature of the early plans relative to ethanol production capacity at the time, but it does hurt hopes for Chinese ethanol purchases under the upcoming trade deal.

Australia

Australia had a reminder that extended weather forecasts are very temperamental tools – the last runs on the GFS have taken away almost all of the rain that was briefly there for southern NSW though they did improve outlooks for Queensland and NNSW.

The BOM continues to call for some light showers into later next week, but again nothing major.  At least temperatures are set to drop slightly.

Barley markets in particular have continued to firm, with WA pushing towards $305/t FIS amidst more export interest, some existing short covering and discussion that much of the crop has already been sold.  Some larger volumes traded yesterday.

Source: Lachstock