Futures markets closed lower overnight, failing to capitalise on a mostly firm open. Crude oil price fell almost 5 per cent as markets responded to results of OPEC meeting in Vienna.
The Australian dollar has rallied, which should make cash markets softer, particularly in wheat where buyers are hard to find.
Australia’s rain is not forecast to fall where it’s needed.
Barley was sold to Saudi Arabia overnight for arrival July and August optional origin, though this time Australia would struggle to compete. World oilseeds markets were firmer, while wheat and corn flip-flop on weather talk.
Beans and canola prices recovered from the Brazilian currency hit on Friday. Barley internationally is in demand from Saudi and China.
Markets were led lower by a combination of macroeconomic and fundamental impacts. The big story was a breaking scandal in Brazil, where the President is the target of corruption charges.
Australian cash markets have been fairly quiet for wheat on the futures break, while barley continues to run on the back of ongoing export demand and a tightening old-crop S&D; it feels like only a matter of time before it inverts over new crop.
Locally the forecast remains very strong for NSW and NVIC in particular. SA has mixed forecasts, as does WA. Some varied opinions on intensity of the rain, however it looks to us that the drier areas in the country; the EP in SA and Western Wheat belts of WA will again miss.
The Australian weather forecast has eased for WA and SA, where we need it the most, and the 25-50mm forecast remains for the majority of NSW and Victoria, where moisture is not a big issue at present. Cash markets will be quiet today, with the dollar over .74, and the overnight futures’ performance. Looking for a basis rally on the east coast today to confirm export interest and execution improvement.
Australian forecast has improved slightly for South Australia, though the falls in WA are missing the parched areas in Kwinana and Geraldton. Plenty of rain fell in Central QLD and NNSW, but maybe too far inland for major benefit to winter crops. Corn futures rallied after the USDA WASDE report, oilseeds neutral to lower, wheat up a little.