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Wednesday, June 04, 2014

Grain markets tumble in May – monthly percentiles

By Augusto Semmelroth  |  Source: CME, ASX, ICE

The improved seasonal conditions in major growing areas in the US coupled with a more stable political environment in the Ukraine saw grain and oilseed markets fall sharply in May. New crop CME wheat prices plunged $34 month-on-month to A$264/t, while ASX Jan-15 eased $25 on the month to Monday, now at $297/t. New crop ICE canola futures fell $20 month-on-month to $470/t.

Key points:

  • All major international grain and oilseed markets tumbled in May as weather concerns in the US and political uncertainty in Ukraine wane.
  • Both old and new crop CME wheat futures eased 11-12% month-on-month, now quoted at US621¢ and 654¢/bu, respectively.
  • In our terms, those same contracts fell around $35 month-on-month to A$247/t (Jul-14) and A$264/t (Dec-14), or the 39th and 59th percentile, respectively.
  • Domestic prices also tracked lower in May on the back of strong downward pressure from international markets.
  • ASX milling wheat July-14 contracts eased $13 month-on-month in May to A$312/t, while ASX new crop prices plunged $25 to $297/t.
  • Basis to international markets remains very strong, particularly for spot markets.
  • While old crop barley prices remained stable in May, ASX FB Jan-15 fell $22 month-on-month to A$234/t with losses in line with ASX wheat and CME new crop corn.
  • ICE Canola spot and new crop futures fell around $20 month-on-month to A$450/t and A$470/t, respectively.

What are percentiles? 

Percentiles (sometimes called deciles) provide one way of estimating what may happen in the future by looking at what has happened in the past. A percentile is a measure of how often, historically, prices have fallen above or below a particular price level. However, it is important to note that percentiles are not a definitive measure of absolute price ranges. They are just one tool in your market information toolbox, and should be considered in conjunction with the other information you use. Read more about how to interpret percentiles

Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report. 

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