Markets

Daily Market Wire 9 July 2019

Lachstock Consulting, July 9, 2019

Grains were lower mostly while oilseeds overnight were firmer.

  • Chicago wheat September contract down 4 cents per bushel to 511c
  • Kansas wheat September contract down 4.5c to 440.75c,
  • Minneapolis wheat July contract down 0.75c to 532.5c,
  • MATIF wheat September contract down €1.50 per tonne to €176.75;
  • Corn September contract up 0.75c to 439.5c;
  • Soybeans August contract up 3c to 879c;
  • Winnipeg canola November contract up C$4.50/t to $447.30;
  • MATIF rapeseed August contract up €1.50 to €364.50;
  • Brent crude September contract down $0.12 per barrel to $64.11;
  • Dow Jones down 115.98 points to 26,806.14;
  • AUD weaker at US$0.6962c;
  • CAD weaker at $1.3101;
  • EUR weaker at $1.1213.

Quiet moves to start the week in the US, with Chicago wheat down 4¢ to 511¢, KC -4.5¢ to 440 ¾¢, Minny – ¾¢ to 532.5¢, and Matif off 1.5€ on the earlier close.  Corn picked up ¾¢ to 439.5¢ and beans were up three cents to 879¢ (Winnipeg canola +$4.5 to $447.3, Matif +1.5€ to 364.5€).  Macro indicators traded mixed, with WTI up 15¢ on the day (though it has given that back up since), Brent off 12¢, and the DOW off 116 points as markets look towards Wednesday’s comments from the US Fed Chairman.  The AUD is trading at 69.7¢, the EUR at $1.121, and the CAD slightly weaker at $1.310.

The USDA’s next WASDE report will be out this Thursday night (midday in the US), with all eyes once again on the corn and bean production stories there.  Surveyed “expectations” are calling for a 165 bu/acre corn yield (-1 vs June) and a 48.5 bu/acre bean yield (also -1 vs June), but there are still questions about how the USDA will handle the acreage survey (with note that they are in the midst of resurveying key areas …).  If they choose to adopt that acreage figure they could well show a higher corn production figure (even with a lower yield) – likewise soybeans if yield is not cut.

Crop progress/condition better

Updated crop progress figures from the USDA today pegged corn conditions up 1% (to 57% g/e) vs last week and beans down 1% (to 53% g/e).  Winter wheat harvest was pegged at 47% complete – aligning well with the on ground reports (and as a related note – protein results have been pushing up as combines move further north into Kansas/Oklahoma areas).  Meanwhile, delayed Commodity Futures Trading Commission (CFTC) position data released early this morning revealed much longer than expected corn length (with managed money net long ~181k, down only 6.3k from prior and vs thoughts of up to 50-70k lower after the acreage report).  Reports the other week about armyworm impacts on Chinese corn production are seeing some new airtime to start the week, with an updated attache report there calling for a 230 millions tonnes (Mt) crop – down some 24 Mt vs USDA estimates.  Crop estimates in China are rarely reliable, but the mix of demand impacts (African Swine Fever) and production risks makes for much ongoing speculation.  On the wheat side, we note that good rains are forecast across much of North Dakota into later this week – with 2-3” on the maps for most of the spring wheat areas.  Conditions there have been steadily improving after the weather patterns changed a few weeks back (from the dry start), though there are still areas with confirmed losses.  Dry conditions further south will allow for continued harvest progress in the winter wheat belt though.

Egypt buying wheat

As we guessed might happen yesterday, Egypt’s GASC has followed up their “sufficient wheat reserves” announcement with a new import tender – this one for mid August.  There is some speculation about how much they will buy (after last tender’s dismal results), but prices are not expected to show any surprises – should work well ex Black Sea region (though as noted with last tender’s results, the higher protein Russian crop this year has discouraged some of the cheaper offers.

Source: Lachstock Consulting

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