Canola firmed almost 2 percent. ASX wheat eased 2 percent. Offshore wheat markets eased.

• Chicago December 2024 wheat down US2.75c/bu to 570.5c/bu;
• Kansas Dec 2024 wheat down 6.5c/bu to 569.25c/bu;
• Minneapolis Dec 2024 wheat down 4.75c/bu to 604.25c/bu;
• MATIF wheat Dec 2024 down €1.25/t to €218/t;
• Corn Dec 2024 down 0.75c/bu to 410.75c/bu;
• Soybeans Nov 2024 up 6c/bu to 982.5c/bu;
• Winnipeg canola Nov 2024 up C$11.30/t to $635.70/t;
• MATIF rapeseed Nov 2024 unchanged at €514/t;
• ASX Jan 2025 wheat down A$6.20/t to $323.80/t;
• ASX Jan 2025 barley unchanged at A$276.50/t;
• AUD dollar up 8 points to US$0.6582.

The day ahead

Weather – Rains fell through the eastern wheat belt in the US with parts of Kansas and Oklahoma getting a little under 2 inches. If the forecast is to be believed, there is 4-6 still to come through the top of Texas into Oklahoma which should catch up their profile for the growing season. SAM/EU all look pretty good. In short – nothing to see here.

Markets – A lot of work to end slightly lower on the week in the grains. Vegoil was up 1-2 percent for the week, Aussie Dollar still sub 0.6600 and crude still below US$70/bbl. Amazing that, over a week with an election, two wars and extreme weather Chicago wheat can finish within 10c/bu of where we started.

Australian day ahead – Smells like demand… or is that yet another head fake. Global markets are aware that Russia simply will run out if they maintain this pace, yet their FOB price fell over US$7/t for the week. Global balance sheets remain tight in the beginning of 2025 but the Asian consumer can buy what they want. This is either the still before the storm or supply chain efficiencies have completely removed the panic. Big yields in NNSW are being met with demand from the domestic feeder – this feels like an enormous game of chicken.

Offshore

Algeria’s wheat tender was maybe an indication that Russia is serious about their floor price. Both Russia and France were well above the eventual offers from the Ukraine.

Saudi sovereign wealth fund’s Saudi Agricultural & Livestock investment Co (SALIC), closing in on a deal to acquire Olam Group’s remaining stage in its agribusiness unit,  is valuing Olam Agri Holdings at around US$4 billion.  

Spec funds continue to pile into Matif wheat, pushing their net short position out to 142k contracts. Given the tightness of the French balance sheet and the pace of Russian and Ukrainian exports this seems at odds with the fundamentals. One thing about positioning in agricultural commodities that gets lost in CFTC commitment of traders reports and such like is that you only see one leg of the trade; there could be a very robust and profitable long leg against this.

Australia

Bids continued to move up in Western Australia yesterday.  Canola gained a further A$8/t to be bid $858 FIS. Wheat bids were up $3 to be bid $373 and barley $316 in most port zones.

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In the east of Australia canola continued to work higher, up around $10, to be $810 for conventional and $758 for GM. Cereals were largely unchanged. 

Harvest is underway across all Viterra regions in South Australia with barley and lentils making up the bulk of the 15,000t that had been delivered at the beginning of the week.  

Despite near record low rainfall for central and northern Eyre Peninsula early reports of 1.5-2t barley yields and 1t lentils are better than was expected. 

Okay, okay. I know India probably won’t import Aussie wheat. Despite its stocks being relatively low, it has plenty of rice. However, as far as my data goes back, ASX wheat vs Indian domestic wheat has only been cheaper once before, 2016. That year Australia shipped over 2.5mmt of wheat to India, mostly from WA.