Weather: Okay, here we go. Spot fires have been smouldering for months in the key growing areas but have not threatened production enough to get the market excited. It seems the concern maybe increasing however. Here at LSC, we have arguably been overly focused on the moisture deficits, Ukraine/Russia and Northern Europe all are well below the 30-yr average rainfall. As we get into harvest we will get some validation on some of the estimates that have been increasing despite challenging seasonal conditions.

Markets: We have seen this movie before – market rallies, wires are full of “not enough moisture” here, and “too hot” there. Only to see the wheat market roll over the following session. The fact Chicago July-25 closed above the very resistant 50-day moving average may get some excited. However, with Mum (Donald) and Dad (Elon) fighting at home we are one tweet away from ignoring Ag fundamentals. 

Australian Day Ahead: Rain is on the way, AUD is range bound and there’s global anticipation around what Putin does next – feels like a market that wants to see what the world looks like after a long weekend

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Offshore

Wheat

Wheat markets firmed on a range of global production concerns. US futures (WN +7.25c) broke above key technical resistance, with implied volatility up to 27.72 percent.  

MATIF shorts reached a record 298k. Production worries centre on dryness in Russia, Mykolaiv (Ukraine), and northern China, where Henan and Shaanxi provinces face exceptional drought.  

China’s wheat harvest is forecast to decline 5pc to 133–135 million tonnes (Mt)—the lowest since 2018—though ample domestic stocks and weak demand should limit import pressure.  

Canada’s Prairies are still under moisture stress, while parts of the Southern Plains and Mid-South in the US are too wet.  

Ukrainian wheat exports rose in May to 849,700t.  

A new tender from Bangladesh for 50,000t also reflects steady demand, something the bears have been focused on.  

From left field – US authorities charged two Chinese nationals with attempting to smuggle Fusarium graminearum, a crop-destroying fungus, into the country. The pathogen poses a serious risk to wheat, corn, barley, and rice, and is classified by the FBI as a potential agroterrorism weapon due to its ability to cause major crop losses and contaminate food supplies. The case highlights growing biosecurity risks amid geopolitical tensions and adds another layer of uncertainty to global grain markets already facing weather and trade disruptions.

Other grains and oilseeds

Corn futures (Dec-25, +5.25c) added risk premium on delayed planting concerns, though old crop burdens and South American supply continue to weigh.  

July-25 corn cash weakened and inverses narrowed.  

Ukrainian corn exports are projected to halve in June (1Mt) vs May (2Mt), as US-origin corn is priced more competitively ($230 vs $256–260 FOB).  

Beans found modest support from tighter-than-expected nearby cash and warmer forecast maps. SX rose 3.5c, SN +4.25c, SMN +$2.60, and BON was flat. July crush improved to 123.5c.  

Old crop sales estimates: 1Mt corn, 300k beans, 350k meal, 15k oil.  

Ukrainian soybean exports in May reached 270,368t, alongside 461,194t of sunflower oil and 344,950t of oilseed meal.  

China has approved coarse ground wheat and rye flour imports from Russia, possibly expanding future grain trade flows.

Macro

US macro signals are softening. May ADP jobs added just 37k vs 114k expected, and the ISM Services Index fell to 49.9, its first sub-50 print since June 2023. Sub-indices on new orders and backlog point to further weakness, although the prices index jumped to 68.7.  

The Bank of Canada held its policy rate at 2.75pc for a second meeting, signalling caution amid tariff impacts and room for cuts if conditions deteriorate.  

In Australia, Q1 GDP rose 0.2pc q/q (1.3pc y/y), with improving household income offset by weak public demand. The RBA is unlikely to cut in July and remains ambiguous on the neutral rate.  

On trade, tensions between the US and China remain unresolved, with Beijing delaying calls with Trump and seeking alignment with the EU. Trump’s re-escalation of tariffs (50pc on steel and aluminium) and China’s tilt toward Airbus deals illustrate growing divergence. Legal uncertainty lingers around Trump’s earlier tariffs, with courts challenging their legality.