Weather:  More rain for Rostov but arguably way too much for the spring wheat areas of Russia. France is going into a dry stretch, but year-to-date totals are well above average. Rain has been a little patchy across northern NSW, but generally slightly better than expected – it will certainly get the dry-sown gear out of the ground; the focus will be on the follow-up rains.

Markets: Donald’s finger is back on the button – we have seen this movie before but there is always the risk that this time he follows through. A futures market that closes completely unchanged always amazes. With all the weather issues facing the HRW belt, Kansas July wheat reckons it was the perfect price the day before. Ocean freight is ticking up a little, easy to forget we have cut 20 percent of the crude flow out, and the longer this continues, the longer the tail will be.

Day ahead – Australia: The battle by the domestic consumer to [get] extra grain from the grower may progress a little as we near the new financial year. Interesting that we have reflected some of these futures moves, despite the US not really having any relevance to our FOB buyers, and the fact we are well above export parity for much of the country

Global wheat: Chicago +2.75c/bu; Kansas unchanged; MATIF +€1.50/t. A mixed session for wheat with Chicago the clear outperformer, supported by a further deterioration in US winter wheat conditions. The USDA crop progress report showed only 27% of the winter crop rated good to excellent, down another point on the week, with drought the primary culprit. The good-to-excellent streak has now declined for 11 consecutive weeks and there was additional talk of freezes overnight in Montana. Kansas was unchanged while MATIF firmed as Paris tracked broader sentiment. EU soft wheat exports for the season reached 20.6 million tonnes (Mt), up from 19.2Mt a year earlier, with Morocco, Egypt and Saudi Arabia the leading destinations. Germany’s winter wheat area was confirmed 1.5pc higher at around 2.9M hectares, though MARS trimmed its EU soft wheat yield forecast slightly to 6.01t/ha, now 5pc below last year but still 2pc the five-year average.

In Australia, analysts and farmers alike are signalling a meaningful shift away from wheat, with six agricultural analysts forecasting planted area to fall 7-20pc from last year as growers pivot to barley and canola.

The dominant theme across all grains remains China, with markets still waiting on official confirmation of the White House’s claim that Beijing agreed to purchase $17 billion in US agricultural exports through 2028. SRW in particular is seen as a likely target if China does appear, with any purchase well above the current 5M-bushel carry-out assumption likely to have an outsized market impact.

Other grains and oilseeds: Corn -1.75c; soybeans -3.5c, MATIF Canola -€0.25.  Corn slipped modestly, weighed down by negative seasonals and generally favourable US planting weather.  The crop progress report showed 76pc of US corn area planted, in line with last year and ahead of the five-year average.

Despite the bearish near-term tone, the China angle looms large here too — if the trade deal translates into meaningful corn purchases, the market would likely move aggressively given the US has never exported more than 21Mt to China in a single year.

Options activity was notable with a combined 34,000 CU 550/600 call spreads blocked over two sessions, an unusually large position that suggests some players are positioning for upside.

Soybeans were modestly lower on the day though the flatten in the new crop reflects some uncertainty — China holds a pre-existing commitment to buy at least 25Mt of US soybeans annually through 2028 so incremental demand from the new deal may be limited on beans.  Brazilian soy processing is running at record pace but a delay in domestic biofuel mandates has left cheap soy oil spilling into export channels.  Longer term, Brazilian soybean production is forecast to grow 3.1pc annually to 2031 as domestic biofuel demand drives consumption to around 91Mt.

ICE canola posted strong gains as markets reopened after the Canadian Victoria Day holiday, with the July contract up C$19.60 to reclaim its 20-day moving average, catching up to Monday’s gains in Chicago that were missed during the long weekend.  Seeding in western Canada remains slightly behind normal.

India’s soymeal exports are expected to halve this year to a four-year low after a 47pc price surge eroded competitiveness against South American product.

Macro: AUD 0.7102; Dow -322.24; Crude -$0.89 per barrel. Markets remained on edge as the Iran situation continued to evolve with no resolution in sight. Trump threatened renewed strikes within days if a nuclear deal is not reached, flagging a window of Friday through early next week, though analysts are increasingly discounting the verbal interventions given the pattern of threats followed by pullbacks.

Brent crude traded above $110 a barrel, still more than 50pc above pre-war levels, with the Strait of Hormuz closure continuing to underpin energy prices and feed through to broader inflation.  The EIA petroleum status report is due Wednesday, with production estimated around 1.084 million barrels per day and stockpiles expected near 24.99 million barrels.

Putin arrived in China for his 25th visit, expected to discuss the Iran situation with Xi. EU negotiators were moving toward scrapping import duties on US goods in compliance with the trade framework agreed last year.

Local markets: Through the west of the country, bids were firmer yesterday following the futures move, canola was up $5-$10/t with current season bid $810 and new crop $846, wheat was $357 and $375, and barley $337 and $340 FIS Albany.   In the east of the country canola was firmer with current crop bid $785 and new crop $820, wheat was $345 and $368, barley $316 and $332 track Geelong.

Feed barley through the north remains well bid in the low $420s with bid/offer spread still wide, much harder to buy than wheat. Sorghum has found its way back into beef feed rations around $370, although this too is becoming hard to buy with most tonnes now either exported or fed.

Traders are reporting wheat has become a little more liquid through Victoria over the last week as growers look to market current season crop, with LSC estimating 35-40pc still to be sold. Current season GM canola continues to be tipped out in Vic with each up day; Western District crops from last year are the gift that keeps on giving.