Wheat strengthens despite corn falling almost 7c.
- CBOT wheat up 2.25c to 429c
- Kansas wheat up 1.5c to 429c
- Corn down -6.75c to 341.5c
- Soybean down -13.5c to 985c
- Winnipeg Canola down -$C5.29 to $C515.5
- Matif canola down -€2.75 to €383.5
- Dow Jones down -101.42 to 23461.94
- Crude Oil up 0.21c to 57.03c
- AUD down to 0.76774c
- CAD up to 1.26822c (AUDCAD 0.97355)
- EUR down to 1.16383c (AUDEUR 0.6595).
The updated USDA report has pumped up corn production even more than anticipated resulting in a finishing number of 370mil tonnes. In an attempt to counteract/justify this they have also increased US corn exports by almost 2mil tonnes as well as a 2 mil increase in feed rationing with finishing stocks pegged at 63mil. It has been suggested that the USDA didn’t want to publish a carryout number greater than 63mil resulting in a simple tweak of the export/feed figures.
Wheat showed strength vs corn with a rally of 2.25c despite the record updated corn yield. Russian wheat has been increased to 83 mil from 82 in October. Russian exports have been raised to 33mil which many suggest is the cap based on logistical restraints. The WASDE report have reduced global carryout slightly although Russia are up 1 mil and EU up 500k. AUS has been left unchanged although exports have been pulled back 500k.
Not great news for beans as the report has reduced carryout by 5 mil to 425 in a time where the market was searching for 420. Global figures haven’t seen a great deal of alteration with Argentina unchanged and Brazil up 1 mil to 108.
Domestically we are seeing the 8 rainfall forecast in NSW gradually increase with the South East now expecting upwards of 25mm with some areas of the Murrumbidgee in line for more than 15mm. We are still getting feedback surrounding frost damaged crops in some areas of Western VIC as temperatures fell below zero degrees in some regions and stayed there for a few hours. In some parts there have been +30% reductions in expected wheat yields with many growers opting to cut their crops for hay. It is now that time when we sit back and wait to get more of an idea on the quality profile of this seasons crops as harvest is well underway in some parts.
Source: Lachstock Consulting