The most-active wheat contract on the Chicago Board of Trade rose to $9.08 a bushel, after peaking at $9.35 a bushel in the session. Australia’s largest grain storage and handling player, GrainCorp, had already given bullish profit guidance on strong global demand and buoyant conditions for a bountiful harvest.
“First, given GrainCorp has grain marketing operations where it buys and sells wheat to customers globally – ultimately the benefit here will depend on how it has hedged its trading position coming into the conflict,” said Andrew Mitchell, senior portfolio manager at Ophir Asset Management.
“And secondly, given the strong global prices, it could attract more wheat into its storage and port facilities, clipping the ticket on the way through.“
Heavy rainfalls in parts of Australia only added to expectations of a bumper east coast crop. The national winter crop is expected to bring record amounts of wheat and canola.
Precipitations
But rain was not good news to Suncorp. Its shares dropped 3.2 per cent to $10.77 after flagging $75 million in costs from more than 5000 claims the insurer received following heavy rainfall and flooding across south-east Queensland and northern NSW. Shares briefly dived to a nine-month low.
Other notable moves included a jump in Virtus Health shares after private equity group BGH Capital sweetened its bid for the reproductive technology and IVF health care company. Its shares rose 2.8 per cent to $7.45, touching a five-year peak.
The Virtus board has yet to evaluate the new proposal, which outdoes CapVest’s $650 million offer. BGH needs to complete four weeks of due diligence and Virtus to agree not to sell any material assets or enter any joint venture before a sale is completed.
IT hardware and software distributor Dicker Data stocks gained 2.6 per cent to $14.15 after its net profit rose nearly 30 per cent.
Rio Tinto jumped 3.2 per cent to $118.17 and BHP leapt 4.4 per cent to $46.66 but Fortescue Metals Group dropped 2.4 per cent to $18.15.
Healthy spending
Financials were mixed with NAB shares edging up 0.1 per cent to $28.94, CBA slipping 0.4 per cent to $93.46, ANZ falling 0.3 per cent to $26.01, while Westpac ended the day flat at $22.81.
The day’s biggest laggard was tech company Life 360, which dropped 8.9 per cent to $5.2. Tyro Payments also came under pressure, shedding 5.5 per cent to $1.535.
Meanwhile, the latest retail sales report beat expectations with a robust 1.8 per cent gain in January as omicron-related drags appeared minimal, a positive sign for the GDP report scheduled for release on Wednesday. Forecasts centre on a 3 per cent bounce for the December quarter following an easing of restrictions because of the pandemic.
January’s retail sales rose to the second-highest level on record, up 6.4 per cent on the year-earlier month, and the 1.8 per cent climb from December was well above forecasts for a 0.4 per cent gain, the Australian Bureau of Statistics reported.
“We have kept our December GDP forecast unchanged for now at 3.5 per cent over the quarter or 4.1 per cent over the year, which reflects the rebound in activity after the fall in GDP in September because of the lockdowns in NSW, Victoria and ACT,” said Diana Mousina, senior economist at AMP Investments.
