Weather: Weather remains a key watchpoint globally, with ongoing dryness across Brazil’s Safrinha corn belt and limited relief forecast for US HRW wheat areas despite freeze risk in the driest regions. Cold temperatures through parts of the US Midwest are also raising some replant concerns, while warmer conditions are expected to aid planting progress across the Canadian Prairies heading into the weekend.

Markets
Overnight grain markets were weaker as optimism around a potential US-Iran peace deal saw crude oil fall more than 7%, dragging the broader grain and oilseed complex lower. Wheat was softer across most markets, although Kansas wheat recovered on ongoing US HRW weather concerns. Corn, soybeans and canola were pressured by weaker energy markets and easing geopolitical risk, while equities rallied and the AUD strengthened.

Day Ahead – Australia

Australian grain markets are likely to open softer today following weakness overnight across global grain and oilseed markets after crude oil fell more than 7% on optimism around a potential US-Iran peace deal. Canola is expected to face the most pressure, while wheat may hold up slightly better on ongoing US HRW weather concerns. It will be interesting to see how domestic markets hold up given recent east coast strength.

Global wheat: SRW -10.50c (-1.67%), Kansas Wheat -3.00c (-0.43%), Matif Wheat -€3.50 (-1.59%)
Wheat markets were caught up in a broad liquidation event driven by optimism surrounding a potential US-Iran peace deal.
Reports emerged that the two sides were close to a one-page memorandum that would see the Strait of Hormuz gradually reopened, Iranian port sanctions lifted and uranium ambitions frozen, with Iran given two days to respond.
The sharp fall in crude oil of over 7% was the primary catalyst for selling across the grain complex, as war risk premium was unwound.
The presence of the Iranian Foreign Minister in Beijing ahead of Trump’s arrival added weight to the prospect of a deal, with China seen as a key broker given its interest in keeping the strait open.
Paris Matif September fell €3.50 while Russian cash wheat was quoted near $241, with Russian May exports tracking 19% above year-ago levels at an expected 2.5 million tonnes.
EU soft wheat exports for 2025/26 reached 19.72 million tonnes by May 3, running 7% ahead of the same point last season.
Kansas City was the standout, recovering sharply from a session low of 668 to settle at 687, a rally of 19 cents off the low, underpinned by ongoing HRW production concerns.
A freeze is forecast for the western third of HRW growing areas overnight, hitting the driest regions where crop condition is already most compromised.
Rainfall this week was unimpressive and the forward forecast offers little relief.
The WQC tour and May WASDE will both weigh in on production estimates next week. Jordan issued a tender for up to 120,000 tonnes of optional-origin milling wheat with offers due May 12, and Canadian wheat stocks as of March 31 rose to 19.47 million tonnes versus 17.38 million a year earlier.

Other grains and oilseeds: Corn -11.50c (-2.40%), Soybeans -16.75c (-1.38%), Matif Canola -€4.75 (-0.91%)
Corn had no equivalent comeback to Kansas City, with the 7% fall in crude oil proving too large an obstacle. July corn settled down 11.5 cents and December lost 10.5 cents, as the prospect of the strait reopening and fertiliser shipments resuming removed some of the supply-side risk premium that had been built into prices.
Safrinha dryness in Brazil remains a daily talking point and cold temperatures in the US Midwest are raising the possibility of replanting in some areas.
Corn export sales on Thursday are expected around 1.4 million tonnes and technical support is seen near the $4.60 level.
The soy complex sold off across all three components with soybeans down 16.75 cents, meal off $3.10 and bean oil losing 189 points, leaving July crush down 11 cents at 328.50.
The Trump-Xi meeting dynamic remains the primary influence on new and old crop beans, with a more constructive geopolitical backdrop seen as a net positive for trade.
Argentine harvest weather turned a touch wetter through the week while Chinese crush margins are not currently incentivising aggressive old crop bean imports.
An unapproved GM strain detected in Argentine soy shipments is adding export risk for the country’s most valuable commodity.
South Korea tendered for up to 60,000 tonnes of soymeal.
Canola came under heavy pressure with ICE July settling down C$13.80 at 743.50, following losses in crude, palm oil, Chicago soy and European rapeseed.
Statistics Canada placed total canola stocks at nearly 10 million tonnes as of March 31, up from 7.84 million a year earlier.
Planting on the Canadian Prairies remains behind pace due to below-normal temperatures, though warmer weather is expected by the weekend.
Matif canola also softened, declining €4.75 on the week.

Macro: AUD +0.75% (1 day), Dow +1.24% (1 day), Crude -7.03% (1 day)
The dominant macro theme was the prospect of a US-Iran deal to end the Gulf conflict, which drove a sharp sell-off in crude oil of over 7% to settle at $95.08 and a strong rally in equity markets with the Dow gaining 612 points to close near 49,911.
The Australian dollar firmed 0.75% on the day to 0.7237.
The proposed framework involves reopening the Strait of Hormuz, removing sanctions on Iranian ports and freezing Tehran’s nuclear program, with Iran given two days to respond.
Trump simultaneously threatened military action if terms were rejected, leaving markets in a fluid and volatile state.
Some traders remain sceptical, with analysts at Mizuho noting that the IRGC is unlikely to agree to surrender nuclear materials and that any strait reopening could quickly revert to stalemate.
On the US economic front, April nonfarm payrolls are expected to show a rise of around 65,000, in line with the recent three-month average and concentrated in non-cyclical sectors.
Fed Chair Warsh’s view that strong productivity growth is disinflationary is seen as consistent with underlying disinflation trends, supporting the case for rate cuts later in the year once inflation is confirmed to have peaked.
Australia announced a A$10 billion fuel and fertiliser security package to be included in next week’s budget, a direct response to supply pressures stemming from the Iran conflict.

Local: WA markets were a little softer yesterday with canola back $5 to $800 and new crop $845, wheat was $345 and $363, barley $348 and $340 FIS Albany.
In the east a similar story unfolded with canola softer and cereals steady, canola was $785, wheat $345 and barley $315 current season track Geelong.
Markets look softer today and it will be interesting to see how these delivered markets respond. With trade likely to stand back, the key question is whether growers follow the market lower or continue to hold firm on remaining stocks.