Markets closed the week lower across the board, with the US markets removing some of the weather risk premium that had previously been built in. The US corn belt has experienced an unusual start to July, with rain and cool temperatures bringing a little reprieve after such a difficult start. Wheat harvest progress in Kansas continued to be hampered due to rain, and the forecast into the new week is suggesting more of the same which can only continue to raise flags around harvest progress, quality and abandonment. 

In Winnipeg, the canola market was off slightly from the four-month highs reached on Thursday. The market experienced some selling pressure due to expected rains in parts of Alberta on Friday and through the weekend. 

Crude oil climbed 3pc on Friday and now finds itself at a 9-week high. Technical buying and supply concerns overpowered fears that further interest hikes in the US and Europe would slow economic growth and put a dent in demand for oil. Fresh output cuts were announced this week from Saudi Arabia and Russia. OPEC producer, Saudi Arabia, has extended its voluntary million barrels per day oil production cut for another month. In addition, Russia confirmed it will reduce supplies to oil markets via a 500,000 barrels per day cut to exports in August. While we are on oil, US investment bank Goldman Sachs predicts the fair value of crude oil to reach US$97 a barrel by the end of 2023. 

Reuters have reported that the delayed monsoon rains and lower rainfall so far in southern, eastern and central states has caused farmers to fall behind in planting key summer-grown crops such as rice, corn, soybeans and cotton. As at 7 July, farmers have planted 35.34 million hectares, approximately 9pc lower than the same time last year. The US total non-farm payroll employment increased by 209,000 jobs in June. This is nearly 100,000 positions below the stronger than expected May data, and below economists’ expectations for a net gain of 225,000 jobs. The unemployment rate ticked down to 3.6pc, from 3.7pc the prior month. 

Algeria purchased 200,000t durum wheat via tender. Thailand bought 60,000t feed wheat, sourced from Romania. 

Australia

Local markets were slightly softer going into the weekend. Trades followed the offshore theme with recent rains helping to shore up production risk. 

Port Kembla wheat drew a $15/t premium compared to ASX at $385/t. 

The much-anticipated tax selling rush has been somewhat of a blip on the radar. The current crop shorts still exist in a combination of trade and consumer. 

The 8-day forecast is looking a little drier which is a welcome relief for those in the southern growing region.