Volatile markets again traded limits and, yo-yo-like, gapped firmer amid daily price ranges of up to 9pc.

• Chicago wheat May contract up US74.25cents per bushel to 934c/bu;
• Kansas wheat May contract up 62c/bu to 953c/bu;
• Minneapolis wheat May up 33.75c/bu to 994c/bu;
• MATIF wheat May contract up €25.75/t to €315.5/t; up 9pc
• Black Sea wheat March contract up $17/t to $332.50/t
• Corn May contract up 35c/bu to 690.75c/bu;
• Soybeans May contract up 52.25c/bu to 1636.75c/bu;
• Soybean meal up <1pc;
• Soybean oil up 6pc;
• Winnipeg canola May 2022 contract up C$31.50/t to $1032.70/t;
• MATIF rapeseed May 2022 contract up €28.50/t to €755.50/t;
• ASX March 2022 wheat contract down A$2/t to $383/t;
• ASX Jan 2023 wheat contract down $5/t to $390/t and 950 lots traded;
• AUD dollar firmer at US$0.726;
• Brent crude oil futures up 3pc.

International

The meeting between Ukraine and Russia ended with a commitment to keep talks open, but that’s about it. Both indicated some progress was made, however, while discussions were underway a 17-mile-long Russian convoy rolled towards Kyiv. It’s very difficult to navigate through the western press given their particular bias but the general feeling today is that while the Russian advancement had been slower than first predicted they have capacity to step up.

The fall in the Rouble will act to increase Russia’s wheat export tax as domestic prices rally via the lower currency. The Russian grower doesn’t really benefit, and probably prefers to stay long inventory with all that is going. That action might stem supply. On the flip side, the Russian farm may be instructed it must sell. It is the timeline here which is the main unknown and is the most significant driver for global balances.

The Ukrainian farmer isn’t doing a lot of farming, nor has access to sprays/inputs which will unilaterally impact yields.

The AUD has been very firm, when many would expect that the world would be running to the safe haven of the USD and pushing AUD rates down, however Australia will benefit from picking up export market share of not just agricultural commodities but also energy and minerals exports. The bid in the AUD has gained additional impetus from the likely downward pressure on the EU economy.

Forty per cent of global nitrogen trade originates from the Black Sea region and prolonged conflict will impact EU most, given the intensity of farming systems, unable to maintain close to trend yields. Reducing yields in Europe by, say, 5pc would be 8 million tonnes less production and would cut stocks-to-use ration of major exporters to an historic low of 15pc come June.

Australian shipping stem is already at maximum capacity in the first half year and cannot bring more supply to market. Stock carried over in Ukraine and Russia may not be available for shipment..

Australia

Australian markets on Monday tried to muster. Delivered bids nominally firmed but bid offer spreads mostly remained wide, execution pressure remaining the focus.

ASX Jan 23 wheat futures saw active trade and settled $5/t lower at $390/t.

Canola bids followed offshore lower.

ABARES March crop report increased current crop projections today, setting national winter crop records. Of the summer crops, sorghum production was forecast 2.62Mt.

Flooding in Queensland and northern NSW continues to put a strain on the execution program with limited freight access back into Brisbane ports and domestic markets. Heavy coastal downpours are forecast over the coming days. The BOM 8-day predicts up to 25mm rain through southern NSW and Victoria which is positive for the 2022/23 seasonal planting outlook.