Mixed but mostly stable markets overnight. US wheat weakened, soybeans and Australian wheat firmed.
- Chicago wheat July contract down US3.50 cents per bushel to 1071.25c/bu;
- Kansas wheat July contract down 1.25c/bu to 1153.75c/bu;
- Minneapolis wheat July contract down 10.50c/bu to 1224c/bu;
- MATIF wheat September contract up €4.50/t to €386.25/t;
- Black Sea wheat July contract up $1.25/t to $408.50/t;
- Corn July contract up 8.5c/bu to 773c/bu;
- Soybeans July contract up 29c/bu to 1769c/bu;
- Winnipeg canola November 2022 contract down C$2.10/t at $1061.10/t;
- MATIF rapeseed November 2022 contract down €7/t to €778.75/t;
- ASX July 2022 wheat contract up A$2.50/t to A$455/t;
- ASX Jan 2023 wheat contract up $4/t to $466/t;
- AUD dollar weaker at US$0.709.
The export corridor is not closed but seems a little further away this morning. The Kremlin announced that no agreement was made with Turkey to supply them what is being referred to as stolen Ukrainian grain. While they said that they are still in discussion with Turkey the fact an agreement wasn’t made is significant. Meanwhile, according to the Russian Grain Union, Russia exported 1.26Mt of wheat during May – more than double the same time the previous year. On the flipside, Ukraine exported 43,500t of wheat in May, down 95pc from the previous year. They did manage to get 959,000t of corn compared to 2.2Mt in May 2021.
The USDA report is always a significant data point but, in this environment, it seems to carry a little more weight. Don’t get me wrong, I am sure the data will be full of debate as indicated by the wide pre-report ranges, but the USDA is the starting point for the market’s balances.
The French crop conditions will be of interest which come out Friday. Conditions have been too dry, then a bunch of hail and wind went through the wheat belt. Once again, global balances are sensitive to any supply change at the moment.
The Buenos Aires Grain Exchange (BCBA) today cut Argentinian wheat sowing estimate by 100,000 hectares, from 6.5 million hectares (Mha) expected last week to 6.4Mha, due to the dry weather in the northwest of the agricultural region, which prevented planting work. If the current projection materialises, the 2022/23 cereal campaign would mark a decrease of 300,000ha with respect to the 2021/22 cycle. At the same time, the BCBA reported delays in the progress of work in the centre-east of the agricultural area, due to low surface moisture. “If this scenario is not reversed in the coming weeks, water limitations could extend to other regions of the area under analysis and result in new adjustments to the sowing projection,” warned the stock exchange entity.
Local values have largely remained unchanged over the course of the week. Liquidity continues to slowly tick over but still remains on the quiet side. The lead from offshore prices for today is modest.
According to the latest ABS data, Australia exported 2,633,809t of wheat in April, up 3pc from March. China was the biggest market by a long shot taking 758,915t of bulk and 2375t in containers. Australia exported 774,340t of barley and 234,529t of sorghum in April – double the previous month with China the biggest buyer again taking 94pc of the total.
The Australian grains industry is set to benefit from a $24 million investment in the Australian Export Grains Innovation Centre (AEGIC) to continue its marketing development and research efforts to build long-term industry success. The WA Government and the GRDC have signed an agreement to contribute $3M each per year from 2022-23 to 2025-26, enabling AEGIC to maintain and build new trade opportunities and industry value.