All grains and oilseeds markets, except spring wheat, eased more than 1 percent.
- Chicago December wheat down US11.5c/bu to 580.75c/bu;
- Kansas December wheat down 7.75c/bu to 647.25c/bu;
- Minneapolis Dec wheat down 1c/bu to 734.5c/bu;
- MATIF wheat Dec down €2.50/t to €233.25/t;
- Black Sea wheat has not quoted since 11 August;
- Corn December down 8c/bu to 468c/bu;
- Soybeans May 2024 down 17.5c/bu to 1369.5c/bu;
- Winnipeg canola May 2024 down C$10.60/t to $702.20/t;
- MATIF rapeseed May 2024 down €7/t to €441.50/t;
- ASX January 2024 wheat up A$1/t to $389/t;
- ASX January 2024 barley up A$9/t to $330/t;
- AUD dollar down 35 points to US$0.6367.
The USDA released its November WASDE overnight which had a few twists and turns. In what was a very late change, the USDA increased corn yield by nearly 2bu/ac, offsetting this production increase by bumping up demand, which resulted in a 2.156bbu ending stocks figure versus the average trade guess of 2.129bbu. Both the yield increase and the demand bump had many scratching their heads.
USDA also bumped soybean yield a little, which grew US ending stocks from 220bbu to 245bbu. This added some pressure to the market but it was interesting to note that export sales for the week were 1.7Mt to China and unknown. It would seem China has returned to the market indicating it may be a little concerned about South American weather.
USDA changes to the wheat supply demand equation, just as with corn and soybeans, was a matter of give and take. It slightly lowered global wheat production, but the cuts in consumption and trade lead to a slightly heavier balance sheet. The Russian wheat crop was increased by 5Mt to 90Mt, India and Argentina were lowered and Australia was left unchanged at 24.5Mt. Interesting to note it cut around 3.5Mt out of Indian production but kept imports unchanged at 0.1Mt, which puts Indian ending stocks at 11Mt compared with the 10-yr average of 17.1Mt.
Local markets continued to hold a slightly firmer tone in the south, with a softer tone in the north. Delivered Darling Downs wheat and barley price premiums have been closing the gap versus Pt Kembla and Griffith markets.
Rain stalled southern NSW harvest yesterday. Falls of 2-17mm were recorded throughout NSW with isolated reports of over 50mm.
The relevance for Australia of the WASDE report overnight includes the fact that despite the report projecting a small increase in wheat ending stocks among the major exporters, the levels are as tight as in 2012/13. This is important for the Australian export program given the strong start made by China. USDA indicates that Indonesia needs 10Mt of imports (pretty much the 5-yr average) with the Australian contribution to Indonesian imports averaging 3Mt over the past 5 years. This becomes an interesting allocation game once we pencil in just over 4Mt to China. It could mean that other traditional destinations such as The Philippines and Vietnam may have to deal with a lower allocation than they previously would have liked.