Markets

Daily Market Wire 9 March 2020

Lachstock Consulting, March 9, 2020

Oil futures fell hard on Friday; grains and oilseeds were mostly lower.

  • Chicago wheat May contract down US3¢/bu to 515.75¢;
  • Kansas wheat May contract unchanged at 446.25¢;
  • Minneapolis wheat May contract up 3.25¢ to 525.25¢;
  • MATIF wheat May contract down €2.50/t to €181.75/t;
  • Corn May contract down 5.75¢/bu to 376¢;
  • Soybeans May contract down 5.75¢/bu to 891.25¢;
  • Winnipeg canola May contract down C$3.80/t to $459.70/t;
  • MATIF rapeseed May contract down €4.25/t to €377.75/t;
  • Brent crude May contract down US$4.73 per barrel to $45.27;
  • Dow Jones index down 256 points to 25556;
  • AUD unchanged at $0.6610;
  • CAD weaker at $1.359;
  • EUR firmer at $1.135.

Market news

Ag futures ended the week with continued slippage pretty much across the board.  Markets remain jittery with reports about coronavirus showing that deaths and cases continue to expand.

Crude oil has fallen to new multi-year lows after a collapse in OPEC/Russia negotiations brings on worries of a supply war. Manufacturing should normally respond positively to the weakness in crude-oil prics, but with the quarantines and travel restrictions, plus a drpop in overall demand, that seems far from a certain short-term response. The flight to safe-haven assets does not yet appear to have stopped.

Corn export sales flashes came up in the US with last week, with 211,000t sold to an market or markets, and 234,000t to Japan. There’s also been talk about more dried distiller’s grain (DDG) business done to China, with benefit from the tariff reductions.  There are still no indications that there’s any interest in grain right now, although tariff exemptions from the other week have started being approved.

South America’s soybean harvest continues. Corn-crop ideas are gradually pushing up the size of the safrinha crop.  Despite a few weather concerns, markets are mostly seen as comfortable.  South American soybeans continue to outprice US supplies, loadings are massive and, if realized, the safrinha corn crop will add further competition in the northern-hemisphere summer window.

US farmers have remained relatively reluctant sellers on corn with hopes for better prices, but that may become a risky proposition later in the spring if confidence improves on the safrinha crop.

There has been more talk about potential China business for US wheat. Cash traders are arguing about whether the ergot tolerances would be a problem in executing any business.  Meanwhile, Black Sea cash markets have remained steady. Conditions for its new crop remain acceptable, but ongoing warm weather is raising a long-term worries about the potential for higher-than-normal spring heat and resulting crop damage.

Australia

Australian markets look set for a quiet start to the week with a public holiday in South Australia and Victoria today.  There are some better chances for moisture into the weekend across the Western Australian wheat belt, which would be well appreciated as we start to look towards planting.

The USDA’s March World Agricultural Supply and Demand Estimates come out tomorrow night.

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