Markets firmed.
- Chicago December 2024 wheat up US4.5c/bu to 589.5c/bu;
- Kansas Dec 2024 wheat up 7.25c/bu to 596c/bu;
- Minneapolis Dec 2024 wheat up 8c/bu to 628.75c/bu;
- MATIF wheat Dec 2024 up €2.50/t to €230.25/t;
- Corn Dec 2024 up 2c/bu to 406.75c/bu;
- Soybeans Nov 2024 up 8.75c/bu to 988.75c/bu;
- Winnipeg canola Nov 2024 up C$13.70/t to $613.30/t;
- MATIF rapeseed Nov 2024 up €4/t to €496/t;
- ASX Jan 2025 wheat up A$1/t to $332/t;
- ASX Jan 2025 barley up A$2.50/t to $291/t;
- AUD dollar up 30 points to US$0.6696.
The day ahead
Weather – Domestic conditions are getting all the attention at present. The rainfall throughout the east coast is a mixed bag of help and hinder. Spare a thought for the Snowtown SA grower who received 45mm rain in the past 24 hours after a growing season with around 150mm (normally >280mm).
Global conditions as follows: Russia and Ukraine have had a dry start to their winter crop year, but the next 15 days should see some relief. German wheat planting is a little late, Argentine weather all about row crops, with some stress in corn. High temperatures are forecast for Brazil which will adversely impact soy production.
Markets – Offshore strength across most of the Ag pits had oilseeds leading the charge with WCE canola and bean oil up 1.9% and 1.85% respectively. Wheat saw a uniform upward move across Chicago, Minni and Matif of around 1pc.
Australian day ahead is all about FX . The offshore moves overnight have been negated by the firmer Australian dollar; the jobs data sucking the life out of any rate cut ideas. Falls of rain received throughout the eastern belt are as confusing as ever. Some areas will benefit, but in the more marginal areas and in the more advanced areas this rain maybe the final nail in the coffin.
The GIAV crop tour is wrapping up so maybe the trade is a little defensive until those results are released. Expect canola bids to be firm today. With Russian cash firming the gap between east coast values and export parity has closed a little but maybe not enough to get the non-asset owners off the bench.
Global highlights
The debate continues around who or what is driving the wheat bus. Is it Matif wheat, is it Russian cash or Chicago wheat? Since last week’s Russian Ag Minister catch up the Russian cash market has found a bid with the forward curve putting early 2025 values within sight of the US$250/t target.
IGC increased global grain stocks to 584Mt vs the Sept estimate of 581Mt. Wheat stocks were pegged at 266Mt (USDA 257.72Mt).
Russia once again is pushing the BRICS nations (Egypt, Ethiopia, Iran, UAE, Brazil, India, China, Kazakhstan and South Africa) to build an alternative payment platform that gets around the western sanctions. Additionally, Russia is allowing Kazakhstan to tranship grain through Russia, but still will not allow Kazakhs to deliver to Russian end users. Interesting to see how this tonnage will appear on export data; will it be labelled Russian wheat?
US retail sales strengthened in September more than the average guess.
Australia added 64k jobs in Sept with the unemployment rate falling to 4.1pc. The average guess leading into the report was to add 25k jobs. The fact the actual result blew this away further casts doubt over a rate cut in the short term
Australia
In the west, cereals remained steady to slightly lower throughout the day’s trade. Canola moved slightly lower (-10) depending on port zone.
Similar moves in the east with both cereals and oilseeds remaining steady.
A wet day is on the cards today for NNSW down to Vic, most calling for 15-25mm. Light falls expected in Qld, which will put a pause on harvest here. A dry day for WA should get the headers rolling after patchy falls there yesterday.