Weather: Not much on the weather front, short term outlook not great for NSW and parts of SA and Vic. Canada’s Prairies are mostly dry with mild temps and only patchy rain in Saskatchewan. India finished the monsoon season 8pc above average after heavy September downpours. In the US, dry and warm conditions in eastern and southern soybean areas are hastening maturity and raising yield concerns.

Markets: Overnight grains markets came under pressure after USDA stocks for wheat and corn came in well above expectations, lifting supply outlooks. Soybeans followed lower despite slightly tighter stocks, weighed by spillover pressure. Canola was steadied by the soy complex, while palm oil and EU rapeseed softened on peak output and weaker vegoil sentiment. Broader trade stayed cautious with a potential U.S. government shutdown adding to risk-off mood.

Australian Day Ahead:  Happy New Year! First day of the 25/26 marketing year but same bearish to sideways markets for now. Offshore weakness in wheat and corn points to softer local cereals, while canola may hold relatively better. China’s coverage from South America limits upside, keeping domestic buyers’ patient and growers cautious particularly in SNSW.

Offshore

Wheat

U.S. wheat futures fell sharply, with Dec CBOT wheat down 2.3% to $5.07 ¾/bu after USDA stocks came in at 2.12b bu, up 6% y/y and above expectations.

Breakdown showed HRW at 804m bu vs 768m est., SRW at 352m vs 339m est., and spring wheat 497m vs 482m est., all heavier than market ideas.

Total U.S. wheat production estimated at 1.985b bu vs 1.921b est., boosting carryout and adding to bearish tone.

Global production also swelling: Poland’s wheat crop revised up to 13.4m tons, Ukraine expanding winter wheat plantings to 4.78m ha, and Argentina pegged at 22mmt for 25/26 vs 18.6mmt last year.

EU soft-wheat exports slow at 4.37m tons vs 6.36m last year; key buyers include Saudi Arabia, Morocco, and Nigeria.

Despite supportive elements (elevated Russian fobs, seasonal U.S. pull, BSEA tensions), wheat remains capped by large global shorts and oversupply.

Other grains and oilseeds

U.S. corn pressured with Sept 1 stocks at 1.53b bu vs ~1.34b est.; Dec corn ended -1.3% at $4.16/bu, testing monthly lows.

USDA revised 2024 corn production up 25m bu to 14.89b bu, offsetting reports of disappointing early yields tied to southern rust pressure.

Soybean stocks at 316m bu (slightly tighter than expected) but futures still fell (Nov -1% to $10.00 ½/bu); USDA lifted 2024 output to 4.37b bu.

Crop progress: corn 18% harvested (66% G/E), soybeans 19% harvested (62% G/E, +1pt w/w). Analysts remain skeptical on yields with dry conditions accelerating maturity.

Canada’s canola exports have slumped 63% y/y to 627k tons while domestic use is steady; harvest may exceed 21mmt vs StatsCan’s 20mmt forecast. Prairie weather mostly dry with localized rains.

China booked 2.7mmt of Argentine soy during the brief export tax freeze, securing cheap supply ($2.15–2.30/bu equivalent) and sidelining U.S. origin until Brazil’s record 173mmt crop arrives in Feb.

Macro/markets

Looming U.S. government shutdown could halt USDA data releases including Oct WASDE, heightening market uncertainty.

Shutdown risk drove investors into safer havens such as gold, weighing further on ag futures.

China’s official manufacturing PMI rose to 49.8 in Sept but remained below 50; private PMI at 51.2 showed fastest expansion since March, highlighting divergence between state and private firms.

Chinese wholesale pork prices at 18-month lows on oversupply; Beijing pressing large producers to cut herds to stabilize prices.

Malaysian palm oil futures fell below MYR 4,400/mt on weaker rival oils and peak output, though expectations remain for stocks to tighten toward year-end.

Broader investor sentiment risk-off as U.S. fiscal deadlock, weak Chinese demand signals, and crude oil swings add layers of uncertainty.

Australia